Sep 10, 2019

Exclusive: Uber Eats widens service to eateries that already deliver

Photo: Mike Kemp/In Pictures via Getty Images Images

Uber Eats is stepping even more squarely into GrubHub's turf with its latest move: letting restaurants join its service even if they have their own delivery drivers. The option rolled out in Europe and the Middle East last month, and is now available in the U.S.

  • Uber Eats has also hit the 1 billion food delivery mark.

Why it matters: There's a lot of pressure on Uber Eats to turn a profit to bolster its parent company's business, so it's no surprise Uber is looking to expand the restaurant side of its marketplace.

While GrubHub began as simply a hub for aggregating restaurants that deliver to customers, the company began to provide delivery for restaurants in 2015.

Details: Restaurants with their own delivery staff can sign up to be available for order via Uber Eats' app, which the company says provides them with an additional channel for new customers (an argument GrubHub has been making for years).

  • The restaurants are only charged a 15% commission fee if they use their own delivery drivers, as opposed to the 30% rate if Uber makes the delivery. They will be able to set their own delivery fees when completing deliveries themselves.
  • Restaurants are also able to use both versions of the service — if they're understaffed at a particular time or want Uber Eats drivers to complete orders in a particular geographic area, for example.

Between the lines: This makes it easier for Uber Eats to work with chains, both national and regional, that have their own delivery operations.

  • Panera, nationally, and Joe's Pizza in New York City are already available via Uber Eats. The company declined to state how many such restaurants in the U.S. it will have signed up at time of launch.
  • Yes, but: It's unclear that giving Uber a 15% cut is worth it for any restaurant, especially if it already provides delivery on its own.

The bottom line: Margins on these orders are better for Uber, according to special projects manager Nike Lawrence, who also tells Axios the company expects them to be net profitable.

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