THE UBER EATS STORY: Revolution or Revolt?

Uber Eats, Deliveroo, Menulog. All now huge players in the foodservice industry. So much so that it’s almost hard to remember what life was like prior to their existence. Gone are the days of dialling Pizza Hut to place an order, before eagerly awaiting a knock on the door. Notes, coins and a cut-out voucher tightly clasped within your sweaty palm. This distant memory is a great reference point as to how far food delivery has progressed and a reminder that things can change fast, especially in foodservice.

Uber Eats entered the Australian market April 2016, but this was by no means the beginning of the food delivery revolution. Companies like Foodora and Menulog had been around for years at this stage, but for the sake of skipping the boring bits we’ll jump to Uber’s arrival. The app was welcomed by consumers into an already murky food delivery market, fraught by Fair Work investigations and restaurants failing to stay afloat. Although not much has changed in terms of controversy, the battle for food delivery supremacy began when Uber Eats burst onto the scene.

What did Uber do differently?

Not a whole lot. The biggest difference being they produced their own fleet of riders to pick up orders. Whereas their competitors mostly relied on restaurants providing their own. Which from the venue’s perspective could be a positive, but this probably wasn’t the reason behind consumers flocking to it. So why did it succeed? Well, in a world where convenience is quickly becoming a form of currency, Uber Eats was the ‘easy option’. Users familiar with Uber’s ride booking system were able to make an effortless transition, dipping their toes into a new concept without fully committing to a new idea. With a large financial backing, Uber Eats was able to spread from the inner suburbs of Melbourne, to a point now where it’s recognised across most of Australia.

Uber Eats as a positive influence:

From a foodservice perspective, Uber Eats’ ability to reach a new market is perhaps its factor of most value. The app has taken gourmet food and made it easier than takeaways. The capability of reaching people on their doorstep should not be underestimated. As working days become longer and normal working hours sporadic, the traditional time for dining of 7pm-9pm is no longer a reliable range for service periods. This allows for businesses to sell more, outside of regular “rush” hours.

On top of selling more, there’s potential to reach more. With smaller venues benefiting largely from this. You might have 12 tables for dine-in customers, but you’re always full. That’s great! You’re busy, probably turning a profit and onlookers can see your success. But this shouldn’t limit your demand, and this is where Uber Eats can really help.

Uber Eats as a negative influence:

A quick Google news search of the company may suggest that it may have some flaws. Subject to legal enquiries, food theft and conflicting reports of customer success seemingly often, the food delivery giant has been involved in a few unflattering news stories.

Furthermore, figures from the Australian Bureau of Statistics seem to suggest that hospitality businesses now tend to fail faster than any other industry. This makes the decision to partner with a delivery service, ever the more daunting. Enjoying the crippling statistics? Well get this; The Restaurant & Catering Industry Association suggest that profit margins for Australia’s restaurants have dropped from 10% to between 2% and 4% since the advent of home delivery apps. Other industry factors including increased product costs and award rates have likely played a part in this as well, but nevertheless anyone considering these types of services should spend ample time planning and preparing.

As a member of the foodservice community, Riviana is all about sharing our learnings and delivering relevant industry content. We’re aware that the best lessons often come through experience. So, if you’re partnered with a delivery service or have experience working with one (a messy break-up perhaps?) We’d love to hear about it. Simply slide into our Facebook DM’s and share with us what you know. Any real-world insight will be extremely useful for those considering Uber Eats.

This article is the first in a series highlighting the implications of food delivery services.