panorama.2019.01.14.takeaway.secrets.exposed

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panorama.2019.01.14.takeaway.secrets.exposed
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00:00Tonight on Panorama, the big tech companies like Deliveroo and Just Eat disrupting the
00:08food industry.
00:09Their aim is to go into an existing market, kill off the competition and take over the
00:15market.
00:16We investigate where your takeaway meal could really be coming from.
00:21We reveal how Deliveroo is taking advantage of planning law loopholes.
00:26I think it's a sort of classic strategy of asking for forgiveness rather than permission.
00:31And we uncover how Just Eat has listed restaurants with appalling standards, which can have fatal
00:39consequences.
00:40I'd call the ambulance because she'd stopped breathing.
00:42It's like living in a nightmare.
00:47Right, what do you fancy ordering, Saren?
00:50Over the past decade, the UK takeaway delivery market has grown by over 70% and is now worth
00:57over £4 billion a year.
01:00How many times a week do you use food delivery apps?
01:03At least one, maybe two a week.
01:06That's it?
01:07I'm thinking more four, five times a week.
01:09Over half of all takeaway orders are now made online.
01:14Here's how it works.
01:15I choose what I want to eat.
01:17I place my order with a local restaurant or takeaway through the app.
01:21The food then gets delivered straight to my front door and the restaurant gets charged
01:24a commission by the company running the app.
01:29The two big players dominating this game in the UK are Just Eat and Deliveroo.
01:36They are part of a new wave of what are known as disruptors, companies which shake up traditional
01:42industries.
01:44A disruptor creates a new market or product or service where there wasn't one in the past.
01:50If we think about, say, Airbnb, they've displaced the whole hotel market.
01:54If we think about Uber, it changes the taxi market.
01:58So it's a completely new way of offering a new type of product or service.
02:02So their aim is to go into an existing market, kill off the competition and take over the
02:08market.
02:09The number of orders placed through food delivery apps has trebled in the last two years and
02:15an increasing number of us are cutting back on cooking at home.
02:23Deliveroo launched in 2013, promising to deliver restaurant meals straight to our front doors.
02:30Six years on, they are the second biggest food delivery app in the UK, with over 15,000
02:36riders zipping across our streets.
02:39Last year, Deliveroo's sales more than doubled to an astonishing £277 million.
02:47And they're aiming to hit 6 million new customers this year.
02:52We've seen a copy of one of Deliveroo's secret investor brochures.
02:56Their vision for the future sees us using the app every day and cooking at home becoming
03:02just a hobby.
03:05Our growing appetite for takeaways has left restaurants inundated with online orders.
03:12So Deliveroo have found an innovative solution that will allow them to keep growing.
03:23They promised to bring the best restaurants to you.
03:27So where is your food coming from?
03:34It could in fact be coming from here.
03:37We are right under a very busy flyover in Blackwall at the City of London's over there.
03:42We're right next to Builders Yard to my left, a car park to my right and inside there, kitchens
03:47in small containers, a world away from what you think of when you think of a restaurant.
03:53Sites like this have been dubbed dark kitchens.
03:57Food with the brand names of 18 different restaurants is produced here and marketed
04:01as Deliveroo Editions.
04:04There are 16 edition sites across the UK.
04:07Here, the kitchens are located in nine containers.
04:10They're tiny, look, that is a kitchen, no windows, basically a box in a car park.
04:18Every food business establishment, even if it's in a car park, has to register with their
04:23local authority.
04:24This means they can be inspected and given a rating so customers know the food is safe
04:30to eat.
04:31So can you find out the hygiene ratings of restaurants operating here?
04:37When we looked up the brand names on the Food Standards Agency website, there was strangely
04:42no trace of some of them at this location.
04:46We sent a freedom of information request to the local authority, Tower Hamlets.
04:51Would we find these brand names registered and on their list to inspect?
04:58So combing through the data, there were 10 that didn't show up.
05:02So just what was happening at this site?
05:05We went in to see if we could find these kitchens.
05:08The first we came across, Buns and Buns.
05:11OK, so this is one of the restaurants here in the Blackhall site.
05:14Let me see if...
05:15No, they're all ignoring me inside.
05:20As well as Buns and Buns, we also found a kitchen with High Street brand name Dirty
05:24Bones.
05:26Once again, we checked with Tower Hamlets, who told us neither Dirty Bones or Buns and
05:30Buns are known to the authority.
05:33It didn't make sense.
05:35So we asked Deliveroo what was going on.
05:38We discovered that when you order Dirty Bones or Buns and Buns foods through delivery auditions
05:43at Blackhall, your food is in fact coming from a company called Restaurant Brands Management
05:49under a licensing arrangement.
05:52This wasn't mentioned anywhere on the Deliveroo website, and without that crucial information,
05:58it was impossible for customers to check hygiene ratings.
06:03Restaurant Brands Management does have a five-star rating, but a customer wouldn't have been
06:08able to find that out.
06:10In a statement to Panorama, Deliveroo said...
06:14When customers order from an auditions restaurant, it's very clearly labelled.
06:20Dishes are prepared by restaurant chefs, with the same high-quality ingredients and
06:24recipes found on the high street.
06:27Deliveroo auditions partners are required to maintain a good or very good rating, four
06:32or five stars.
06:34Since we contacted them, Deliveroo have changed their website to clarify in the small print
06:40which restaurants operate under license or as virtual brands.
06:45Deliveroo also has a problem with planning permission here.
06:49After their temporary permission expired last summer, they asked to renew it and to
06:54add two more containers.
06:56The local council refused to renew their planning permission in July, but they're still operating
07:01anyway.
07:02The law allows them six months to appeal, so Deliveroo are still here.
07:08Finding creative ways through the rules is a common strategy of disruptors.
07:14The key part of their business model initially is to outrun or outskirt rules and regulations,
07:19so often using the banner of tech disruptor as a kind of an alibi.
07:24And when you get pulled up, you can just say, oh, didn't realise.
07:27Yeah, either didn't realise or didn't realise that it applied to us, or in fact it doesn't
07:31apply to us.
07:32We're operating in this completely new and innovative market.
07:35You need to, as regulators, tell us what to do.
07:38In September 2017, Deliveroo announced it was prioritising the rapid growth of these
07:45delivery-only sites across the country.
07:48They are aiming to almost double their number this year.
07:53This is Swiss Cottage in North London.
07:56Here, Deliveroo set up another nine industrial kitchens, hosting 20 different food brands.
08:05There are strict planning regulations for opening a takeaway in the UK.
08:09Believe it or not, Deliveroo argue they are not a takeaway because customers place their
08:14orders online and not in store.
08:17At this site, Deliveroo are claiming they can use a type of planning permission reserved
08:21for light industrial operations.
08:24Deliveroo argue that as they come under this light industrial class, they don't need to
08:29apply for extra permission.
08:31So local residents didn't know that an industrial kitchen was opening on their doorstep.
08:36But a business cannot legitimately use this planning class if it has a detrimental impact
08:41on the surrounding community.
08:45Mark Hutchinson is a member of the Local Residents' Association.
08:49He lives on a road that directly overlooks the Deliveroo site.
08:54It's a constant nuisance, so we have to put up with a vast increase in the number of bikes
09:00making journeys to and from the area, so you've got all that noise and inevitably some of
09:05them break the law riding on a pavement and zooming in and out of traffic.
09:10Residents took their concerns about the kitchens to their local councillor.
09:15It's a very large scale operation on a very tiny site.
09:19Deliveroo estimate a peak of 192 mopeds an hour.
09:25Deliveroo's transport statement for this site estimates there could be up to 194 scooter
09:30trips in peak hours.
09:33The local council concluded that the site is having a detrimental impact on the local
09:38community and served Deliveroo with an enforcement notice to close the site.
09:43But Deliveroo is appealing the council's decision.
09:48They're going to be allowed to continue to operate while the appeal works its way through
09:51the courts and I think they know that they're going to be able to continue to make money
09:56while the appeal is heard.
09:58I think it's about Deliveroo putting their profits ahead of the communities that they
10:03set up in.
10:04I think it's a sort of classic strategy of asking for forgiveness rather than permission.
10:08And this isn't an isolated case.
10:12Panorama has discovered that another three Deliveroo dark kitchen sites, two more in
10:17London and one in Brighton, have been told to close and served with enforcement notices
10:22for operating in residential areas in breach of planning controls.
10:28These planning controls aren't just about preventing noise and nuisance.
10:33They are also being used as part of a strategy to tackle obesity by limiting the number of
10:39new takeaways.
10:41Deliveroo are able to avoid these restrictions.
10:45They say they are not, in fact, a takeaway.
10:54I think that's an easy get out clause.
10:56And Deliveroo considering themselves not a takeaway but still delivering takeaways is
11:03a direct undermining of the strategy of a lot of local authorities around obesity.
11:10In a statement to Panorama, Deliveroo said,
11:13We're confident that the current planning permissions allow Editions Kitchens to operate
11:17at their current locations.
11:19We've been advised by the leading legal expert in planning law that Editions Kitchens operate
11:24lawfully, advice that has been backed up by councils.
11:28Deliveroo is committed to being a good neighbour and working with local communities to address
11:33any concerns raised.
11:35We regularly hold meetings and have made changes as a direct result.
11:40We operate a zero-tolerance policy with regards to breaches of the Highways Code.
11:45Deliveroo added,
11:46We're working hard to make healthy eating even more accessible for everyone.
11:57In the UK, the biggest takeaway delivery app by far is Just Eat.
12:02With glossy adverts and prominent branding on our high streets, it's become a trusted
12:06way to order food.
12:10Just Eat. Summon up your favourite takeaway tonight.
12:13In 2017, Just Eat became one of the UK's 100 most valuable listed companies, worth £5.6
12:22billion, making them worth more than Sainsbury's, M&S or Morrisons.
12:29Just Eat has signed up 29,000 restaurants and takeaways and a staggering 10 million
12:34of us used the site last year. That's a fifth of all UK adults.
12:40Unlike Deliveroo, Just Eat's business model relies on the takeaway restaurants themselves
12:45providing the delivery service.
12:50The founder of Just Eat once described it as the perfect business model because they
12:56don't actually handle any food, they just take the orders.
13:00Handling food is a bad business. We know that restaurants often lose money rather than make
13:05money, whereas being a platform that connects consumers and the restaurants is actually
13:10a very good business. It means that you can take larger rewards without taking the significant
13:14risks which comes with actually running a restaurant.
13:18Food safety is an integral part of running a takeaway business. Environmental health
13:24officers in England, Wales and Northern Ireland give every business they inspect a rating
13:29between zero and five, zero being the worst.
13:34How bad does a restaurant or takeaway need to be to have a zero hygiene rating?
13:40Very very bad. We're looking at significant non-compliance with the law, serious non-compliance
13:46with the law.
13:47None of the big online takeaway sites display hygiene ratings when you order and Panorama
13:54discovered over 100 zero rated restaurants and takeaways listed on Just Eat.
14:00We've obtained some of the inspection records for these restaurants. The conditions are
14:04I mean seriously shocking. Restaurants that had cockroach infestations, rat and mice infestations
14:11and really bad hygiene standards.
14:14And that's extremely worrying from a public health point of view because at the end of
14:19the day we all want to be able to go onto a Just Eat website, buy food and have a reasonable
14:25expectation, a strong expectation that the food we're buying through there is safe.
14:31Of the zero rated for hygiene restaurants we found on Just Eat, more than 40% had been
14:37reprimanded for also having poor allergen controls in place. And that can have deadly
14:44consequences.
14:46Two men have been found guilty of the manslaughter by gross negligence of a 15-year-old girl
14:52who suffered an allergic reaction to a takeaway meal.
14:56In January 2017, Megan Lee died after eating a takeaway meal that she'd ordered through
15:02Just Eat.
15:03She was our princess. She was our first child. The family's first grandchild. She really
15:11looked after her brother. She was a role model to Owen. They were always making little videos
15:16and video clips.
15:17She loved that. And he loved that. They loved to do that together.
15:23Take me back to December 2016. What happened?
15:27That morning she planned to go to Blackburn Town Centre with her friend. They did the
15:34shopping and then went back to her friend's house because they were revising for the exams.
15:40And then she messaged in the afternoon at some time, is it OK if I stay for tea? I think
15:44we're going to get a takeout.
15:47Using Just Eat, Megan and her friend ordered a takeaway from the Royal Spice restaurant
15:52in Lancashire. Megan had a nut and prawn allergy. Her friend specified this on the Just Eat
16:00order. But after eating the meal, Megan returned home and quickly became ill.
16:09My lips started to swell. I instantly knew that it was an allergic reaction. I'd called
16:15the ambulance but I had to put my phone on the floor because I had to do CPR because
16:19she'd stopped breathing. It's like a nightmare. It's like living in a nightmare. I can't describe
16:26it in any other way.
16:28The meal was subsequently found to be contaminated with peanuts, a result of poor food safety
16:35at the restaurant. Megan was rushed to hospital in Blackburn and spent the next two days in
16:41intensive care.
16:45I remember us sitting with the doctor. He told us that there was nothing more that they
16:50could do. It was time to let her go and she wouldn't have survived without life support.
17:06This is where Megan and her friend ordered a takeaway from in December 2016. The managers
17:12were found guilty of manslaughter by gross negligence. The jury heard it was a disaster
17:17waiting to happen.
17:21During the trial of the Royal Spice managers, Just Eat were called to give evidence. They
17:26made clear that when a restaurant signs up, they agree to be solely responsible for food
17:32safety rather than Just Eat.
17:36You could say that's not their responsibility, but I think it is. I think they have a major
17:40influence now on many, many transactions between people with food allergies and food businesses,
17:47and they have opportunities to reduce these risks if they take that responsibility into
17:52their hands.
17:54All food businesses are legally required to be able to provide information about 14 major
18:01allergens. This includes being able to tell customers whether a meal contains nuts, dairy,
18:07gluten or wheat, all of which can be life-threatening. Just Eat argues it's not a food business and
18:16simply passes this responsibility onto the takeaways themselves.
18:23With the influence that Just Eat have, they can certainly say to the takeaways, you need
18:29to meet these guidelines in order to be on the list for Just Eat to advertise or use
18:35this platform.
18:38Just Eat have put themselves right between the customer and the business, and if they
18:42don't address the information needs, then they're quite possibly going to be involved
18:48in yet another fatal reaction.
18:51In a statement to Panorama, Just Eat said, we were deeply saddened to learn of the tragic
18:57death of Megan Lee, and our thoughts are with her family and friends. As a leading
19:01player in the sector, we take the issue of allergens very seriously and continue to work
19:06with regulators, government, professional health bodies and our restaurant partners
19:11to help prevent similar tragic incidents.
19:17Just Eat endorse some takeaways as local legends, the creme de la creme of takeaways in your
19:24area. These feature eye-catchingly at the top of the listings. Just Eat say only restaurants
19:30with the highest food hygiene ratings can be given this title. Yet we found a restaurant
19:36with a zero hygiene rating crowned as local legends.
19:43It's extraordinary, isn't it? The food hygiene rating system is vastly important for us understanding
19:50how good a restaurant is, and so to have a zero rating, I don't think in anybody's mind
19:55would be a local legend.
19:59Two years after the death of Megan Lee, we found Just Eat continue to actively promote
20:05takeaways with poor hygiene and allergen standards. Just Eat still don't require restaurants
20:13to provide any allergen information on their site. Instead, they put the onus on customers
20:20to contact the restaurants directly to find out whether your meal is suitable for you.
20:26So does this system work? Posing as a customer with an allergy, I followed Just Eat's advice
20:34and phoned zero rated local legend Carro's Pizza in Liverpool to see if they could give
20:40me the legally required allergen information.
20:45If I order the cheeseburger and I have a wheat allergy, is that okay for me?
20:49To be honest, I don't know. I don't know what to say, you know?
20:54Okay, alright.
20:56Alright, alright.
20:57Thank you, bye.
21:01Next up, Tong Feng House in Greater Manchester. Five star customer reviews, but our research
21:08shows it's zero rated for hygiene.
21:12I just wanted to know, is there wheat in the chicken chow mein?
21:16No, there's nothing.
21:18There's no wheat, definitely no wheat in the chicken chow mein?
21:22No.
21:22Are you sure?
21:24Yes.
21:25Okay, thank you very much.
21:27Okay, thank you.
21:30We collected the chicken chow mein and sent it away for testing.
21:35Okay, that's it. Check out.
21:38I ordered another meal using the Just Eat app from Mamma Mia Pizza in Birmingham.
21:44Another takeaway with a zero hygiene rating.
21:49I ordered a burger without the bun.
21:52So would they be able to tell me if there's gluten or wheat in my meal?
21:58Hi there, I've come to pick up my order from Just Eat.
22:02No buns, yeah?
22:04No buns, so is that a burger and chips?
22:07Yeah, can I just check, because I've got a wheat and gluten allergy.
22:12Is there any wheat and gluten in that?
22:14What's that mean?
22:15Wheat and gluten, can I eat that?
22:18I have a wheat and gluten allergy.
22:22Okay, and the burger?
22:23The burger is just a salad, just plain beef burger.
22:27Inside the beef burger, there's no wheat?
22:31Wheat, wheat in the burger?
22:33No.
22:37Thank you very much.
22:42Thanks so much, bye.
22:46We sent the burger away for testing.
22:48There was, in fact, gluten in the burger.
22:52We also got the results back from the chicken chow mein.
22:55It was full of wheat.
22:57So that's two restaurants listed on Just Eat that gave me incorrect information
23:02that could have been really dangerous for me if I had an allergy.
23:06In a statement to Panorama, Just Eat told us,
23:11we take food safety extremely seriously,
23:14actively working to raise standards and offer free food hygiene training.
23:19We've also announced plans to display food hygiene ratings in 2019.
23:25We were concerned to learn about the individual restaurants
23:27not providing accurate information.
23:30We launched an immediate investigation
23:32and have already offered further support and training.
23:39They added that the poorly rated restaurants that we found
23:43should not have been promoted on their site.
23:46Caro's Pizza and Mamma Mia Pizza told us they believe staff
23:51didn't understand our question
23:53and both add that they display allergy information in store.
23:57Caro's Pizza add that they've requested a new hygiene inspection
24:01under new management.
24:03Tong Feng House told us a new staff member provided the incorrect information
24:08and they are retraining their team.
24:14In the UK, more than a third of all restaurants,
24:16takeaways and cafes now use online delivery apps.
24:20You might think that would be good for business,
24:22but the rise of these technology disruptors
24:25has left some businesses struggling.
24:28Restaurants pay a substantial commission on each order
24:31they receive through the delivery apps.
24:34Jaquir Ahmed has been running this curry house in Bristol
24:37for the past 17 years.
24:39In 2009, he was approached by Just Eat.
24:44Their rep used to come round and keep trying and trying,
24:48you know, to show us the benefits of, you know,
24:51why we should sign up with them.
24:54He eventually signed up and says he agreed to pay a 9% commission
24:59on Just Eat orders, but that quickly increased.
25:03The commission rate keeps going up.
25:05I started online and now it's up to 14.
25:10He also noticed that his restaurant started slipping down
25:13the Just Eat listings despite good reviews.
25:18They started introducing sponsored links.
25:20Every couple of weeks, you know, somebody phoning up saying,
25:23if you pay £200 a month, we can put you on the website.
25:27But to pay to be on there, now that can be done by anybody.
25:31Just Eat claim they only allow restaurants
25:34with a hygiene rating of three or above
25:37to pay to be promoted on their site.
25:40But we found numerous examples of takeaways and restaurants
25:43with less than that right at the top of the listings.
25:47It's just not ethical, as far as I'm concerned.
25:52Many family-run restaurants like this operate on a thin profit margin.
25:58And with food delivery companies like Just Eat
26:00charging substantial commissions,
26:03it's proving harder than ever to survive.
26:06It becomes unmanageable and unaffordable, in my opinion.
26:11I can give you a list of restaurants that I've closed down,
26:13if you don't do your calculations in terms of, you know,
26:17profit margins and costs and everything,
26:19then you're not going to be around.
26:21If you're not ordering from your local favourite takeaway
26:24and you decide that it's easier to order from the platforms,
26:29then actually you're taking business away from your local restaurants
26:33and the high streets could become entirely empty.
26:36As tech companies without a presence on the website
26:39are forced to make their own choices,
26:41as tech companies without a presence on the high street,
26:45Just Eat and Deliveroo don't have the same burdensome overheads
26:49of traditional takeaways.
26:51Disruptors essentially take on very low risks.
26:54They don't have to actually produce the product or invest in capital,
26:57but then they take very high rewards.
26:59By doing that, they are then able to monopolise the market.
27:02And if anyone wants to get their food delivered,
27:05there's only one or two games in town anymore.
27:08Jaqir has now removed his business from Just Eat.
27:13They didn't force my hand in terms of signing the first contract,
27:17but they have changed the rules.
27:21And that's what I'm bitter about.
27:24I don't think they give a damn.
27:25They're just too big.
27:27And I think most of the businesses will not come up against Just Eat
27:30because they're just too big an organisation.
27:34Just Eat and Deliveroo have both built
27:37billion-pound businesses by changing the way we eat.
27:41And there's no sign of their rapid growth slowing down.
27:45The simplicity of ordering through my laptop
27:47without getting off the seat is great,
27:50but there is a cost of convenience.
27:52But I don't think people are actually aware of that.
27:54If I was aware of what it's going to actually cost the business
27:58in terms of ordering through that means or a different means,
28:03I would think twice.
28:04Your favourite takeaway that you might have used for years
28:07just can't compete with a ten shack by the railway line.
28:12We become addicted to the app.
28:14We get hooked on cheap deliveries which are super convenient
28:17and only later do we find out there's problems in the longer run.
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