Good News for Uber and Grubhub

The food delivery market is booming, thanks to the growing adoption of mobile food delivery apps. That’s been a boon for companies like Grubhub (NYSE:GRUB), Uber (NYSE:UBER), and privately held DoorDash. Uber Eats, the ridesharing company’s food delivery segment, has been rapidly expanding and bolstering engagement on Uber’s platform.

Fortunately for food delivery companies, there’s plenty of growth to come in the years ahead.

eMarketer just released estimates on U.S. food delivery apps, with the market researcher forecasting that the number of people that use food delivery apps will soar 21% this year to 38 million. That should climb to 44.1 million by 2020 and then hit 59.5 million by 2023, according to the report. That means by 2023, nearly 24% of smartphone users are expected to use their phones to get some grub.

… The overall pie looks set to keep growing, and it’s unclear if recent controversies will derail that growth. DoorDash received backlash earlier this year over its tipping policy, which allows the company to subsidize base pay with tips. Grubhub is finding itself in hot water for creating microsites for restaurant partners that juice its commissions. Average consumers may not care about those issues, even if they should.


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