Leading publicly listed online food delivery companies in the U.S. and Europe have collectively accumulated over $20 billion in operating losses. The firms are facing a challenging economic environment, and their stock prices have been affected.

What Happened: Despite fierce competition for market share, the top four standalone, publicly listed food delivery companies in the U.S. and Europe, including Deliveroo (DROOF  ), Just Eat Takeaway

(JTKWY  ), Delivery Hero (DLVHF  ), and DoorDash (DASH  ), have been trading below their pandemic-induced peaks, reported the Financial Times on Wednesday.

As per calculations from the Financial Times and industry analyst the DeliveryWorld, these companies have incurred a combined $20.3 billion in annual operating losses over the seven years since Deliveroo, Delivery Hero, and DoorDash went public, and after Just Eat Takeaway was formed following a merger in 2020. This includes substantial writedowns related to acquisitions and stock-based compensation.

The companies, which experienced exponential growth during the pandemic, are now contending with a more challenging macroeconomic environment that has adversely impacted consumers. The focus has shifted from adjusted earnings before interest, tax, depreciation, and amortization to operating losses as a more standardized view across all companies.

Amid a decline in sales growth rates, these companies are exploring new revenue streams such as grocery delivery and higher-margin advertising businesses to accelerate growth. The industry is also experiencing consolidation, with some players exiting certain markets and others doubling down in areas they believe they can dominate.

Why It Matters: The food delivery industry has experienced significant developments in recent times. In April, a bullish analyst predicted strong monetization potential for DoorDash in new verticals. This projection followed a series of strategic moves by the company, including the introduction of new services and expansion into other markets.

Meanwhile, Uber (UBER  ) announced the purchase of newly issued ordinary shares of Delivery Hero ad to acquire FoodPanda, a prominent player in Taiwan's food delivery industry. This move was expected to bolster Uber's presence in the region and intensify competition in the global food delivery market.

However, the struggles of these companies also shed light on the broader challenges in the food delivery sector. For example, Deliveroo's disastrous IPO in London in 2021 had a significant impact on investor sentiment in the industry. The company's stock plummeted, raising questions about the long-term viability of the food delivery business model.

Similarly, in 2023, major delivery companies failed to prevent a minimum wage increase in New York City. This development highlighted the ongoing regulatory challenges facing the industry and the potential impact on the companies' bottom lines.