Report: McDonald’s may end exclusivity with Uber Eats

  • McDonald’s is reportedly in talks with Uber Eats to negotiate lower fees for its U.S. restaurant operators that includes a significantly reduced commission rate, according to an internal memo obtained by Bloomberg
  • The memo also states that McDonald’s is working to negotiate franchisees’ ability to use other delivery partners.  
  • Following the finalization of the new terms, Uber plans to provide a large contribution to help support national advertising to help McDonald’s build up awareness about the service. 

These negotiations show that McDonald’s may have finally had enough of the high commission fees charged by Uber Eats. In Uber’s IPO filing, the company outlined its take rates (adjusted net revenue divided by gross bookings) for food delivery of about 10%. In 2016, Uber Eats’ take rate was 4% according to Skift Table.

Delivery is now a must-have to legitimately compete in the restaurant space, and the service has added to check sizes for McDonald’s, but delivery fees can add a significant amount of pressure on an already thin-margined business. 

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