Uber Eats Needs to Deliver More Than Ever

Its explosive growth is crucial at a time when Uber’s largest business, ride hailing, is slowing.

…Through its Uber Eats food delivery business, Uber is now a business-to-business services company for the restaurant industry. And maintaining its lofty valuation will depend in part on how well it does catering to their needs and adding value to their businesses.

Uber Eats generally is becoming more important to the company’s ecosystem. It is growing explosively at a time when its largest business, ride hailing, isn’t. It’s not entirely clear why ride bookings have dipped recently, but as my colleague Shira Ovide has noted, it raises questions about whether the market for on-demand taxis is as massive as the industry’s bulls believe.

Forecasts for the restaurant industry, however, make clear that digital-powered delivery is going to be a lucrative growth area for years to come. And it’s important to understand what a different task it will be for Uber to score in that business than it has been to win in on-demand rides. With ride-hailing, Uber’s primary responsibility is to nurture and maintain a sprawling network of drivers — a bunch of people who, alone, have very little power and, in isolation, are pretty dispensable.

With Uber Eats, though, there’s another layer. Yes, it still has to have a massive fleet of drivers and cyclists who are incentivized to be on the road often and to get your pizza or burger to you piping hot. But it also has to make itself indispensable to huge, incumbent companies like McDonald’s Corp. and Starbucks Corp. — and to mid-size and regional restaurant businesses, too.

The company has ways to do that: It has built software for receiving Uber Eats orders that integrates with existing point-of-sale systems and provides restaurants with an analytics tool to help them make decisions about their menus or other aspects of the business.


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