Food delivery services challenged by Uber

Food delivery to scale.

Uber Eats started two years ago, and last week they launched their food delivery service in London. It’s the second city in Europe.
Uber Eats is now available in 19 Cities (mostly in the US, but also Canada, Europe, Asia & Australia).

Restaurants have a limited scaling potential, mainly because of the number of tables. Of course they can open more locations, but those also will be limited by the available place for tables.

A take away service is one method of growing the business, and to optimize the use of the kitchen.
Another method is providing a delivery service, but this is limited by the number of drivers. Outsourcing the delivery service, has ushered scaling to a new level. Even opening a restaurant without tables became a valid business case.

Disrupting the disruptors

 

Essentially three ingredients define Uber Eats:

  • an extensive network of restaurants (over a hundred restaurants in most cities),
  • a network of motorbike and bicycle couriers for delivery (over a thousand in London),
  • and an easy to use app which even allows you to know where your order is and when it will arrive. It also has an integrated rating system to weed out couriers and restaurants.

The Uber transportation business model has proven to scale in larger cities. There is little reason why Uber Eats can’t do the same thing in food delivery. I suppose they’ll encounter even less opposition than Uber has.

In London they try to break open the market, challenging other apps like Deliveroo, Hungry House, and Just Eat. Compared to Deliveroo they are still a small player for the time being (see infographic). But they already announced the intention to enhance their coverage of London.

Uber Eats London tries to reach momentum by offering free delivery during the launch of the service. For your first order you get a reduction coupon, with a promise of delivery within 30 minutes, or you’ll get a reduction next time. They even don’t impose a minimum order.

Sources:
Infographic : The telegraph
ubereats.com
ubereats.com/london
www.digitaltrends.com
www.telegraph.co.uk
www.theregister.co.uk
www.theverge.com
www.timeout.com

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