UberEats Business Model
Understand the way UberEats work to build your business the right way from UberEats business model revealing benefits
After achieving the taxi-hailing business roaring success, Uber has decided to enter into the food delivery business. Therefore, Uber has launched UberEats and its UberEats business model, which teaches the right way to achieve success in this on-demand economy. Having the support of a vast fleet of drivers at their side, UberEats can get the order delivered to users as fast as possible from their choice of restaurants.
Food delivery apps are growing in popularity; more than 38.0 million people in the U.S. will use these apps, up by 21.0% over 2018. By 2021, about 20% of smartphone users in the U.S. will use a food delivery app. The number will surpass 44 million by 2021 and predicted to reach 60 million by 2023. (Source)
Uber launched its food delivery business in August 2014 named Uber Fresh initially. Then it was renamed as UberEats in 2015 and started delivering food across the countries. Therefore, UberEats is developed and deployed to serve users and is currently operating successfully in 71 cities across 24 countries worldwide and owns 5.3 million users per month by its side. UberEats’ business model is cost-effective and efficient; explore the whole model below. In 2019, UberEats captured around 25.2% of consumer spending in the United States, respectively.
What is UberEats?
Uber Eats is a three-sided marketplace connecting restaurant, customer, and a driver with Uber Eats platform at the center. The delivery platform mainly moves around three players, making it easier for food lovers to order their favorite meals from local restaurants. Restaurants have to pay commission to use the UberEats platform, while customers have to pay small delivery charges to get their orders delivered right at their place. The delivery platform makes it easier for drivers or service providers to earn more by offering reliable delivery service to customers on time.
Amazing Facts & Figures About UberEats
Founders: Garrett Camp and Travis Kalanick
Founding Year: in 2014
Headquarters: San Francisco, California, U.S.
Area Served: 45 countries, 6000+ cities.
Revenue Increase: $1.46 billion
Current Valuation: $350 Million
UberEats has achieved massive growth since its inception. During 2018, the company saw around $2.6 billion in gross bookings; the metric was mainly used to define total sales.
UberEats global consumer spending is projected on off-premise orders through restaurants is $795 billion, with diners shelling out about 20% of the figure dedicated to home delivery. The third-party service has captured about 1% of the total market so far. UberEats gross bookings total was around $7.9 billion during 2018. (Source)
How UberEats Works?
UberEats allows restaurants to tap into a bigger market where many customers are placing orders. As the customer registers with the app, they can view all the registered stores and their menus to select items they want to order. Once a customer places the order, that particular store gets notified with the order details. And they prepare the order as per the customization and special instructions given by customers.
And later, the store places a delivery request for delivery providers. All nearby delivery providers receive the request, and the one who accepts it gets the order details, including the pickup and the delivery location details. As the provider picks up the order from the store, a pickup confirmation gets sent to a customer. The confirmation is the form of an image clicked by him/her. Using efficient navigation support, the provider reaches the customer’s location and delivers the order.
UberEats Business Model: Explore Everything to Know About its Operational Strategy
Uber Eats is an online platform enabling customers to order food from local restaurants. The platform has made it relatively easier for customers to have their favorite food delivered right at their doorsteps. A subsidiary of Uber Technologies, the promising platform, follows a hyperlocal on-demand business model enabling the company to perform all tasks efficiently and systematically. UberEats has partnered with more than 46000 restaurants to provide customers seamless delivery and ordering experience whenever they demand.
Explore Three Sided Marketplace Business Flow of UberEats
UberEats operates on a three-sided business model, acting as a bridge between restaurants and food lovers; learn how the on-demand delivery provider ensures a seamless experience offering to customers.
- Customers can search for nearby restaurants and can place an order from them.
- Restaurants receive an order and prepare food.
- The delivery provider delivers the prepared meal and collects money.
- UberEats promises to deliver orders within 30 minutes from a local restaurant in most of the cities.
- UberEats mainly works on the principle, “We do not want your food traveling halfway across town.”
- Customers can easily order their favorite meal by paying standard delivery charges ensuring orders are satisfied irrespective of the requested value.
- UberEats have millions of active users across the world as the platform offers a fantastic delivery experience to them on their demand.
How UberEats Benefits Food Lovers?
- Food lovers who wish to receive their food immediately
- People who don’t have time to cook
- Customers who aim to get their food delivered at their place
How UberEats Benefits Restaurants?
- Restaurants who want to increase their business reach
- Food stores aim to improve their customer base
- Restaurant owner who want to increase their brand visibility and loyalty
How UberEats Benefits Service Providers?
- Freelancers and service providers who want to earn extra money
- Unemployed persons
Stakeholders of the UberEats Delivery System
Stakeholders of the system are the prime benefactors who receive excellent services and benefits by using the app solution. And these stakeholders are:
Users who download and register the app can benefit from the online ordering facility. Moreover, they can track the progress of their order and delivery in real-time with the embedded functions of real-time tracking on the map.
Delivery providers who register for delivering orders also earn from the deliveries. They can make deliveries and fulfill the delivery requirements as well. Introducing an integrated map in the dedicated solution helps them deliver on time.
Restaurants can benefit from online visibility that they gain with the app solution. Also, they can earn profits from the online orders placed by the customers. Using the dedicated store application and panel, they can manage their business operations efficiently.
Customers- Customized Orders
Customers can place customized orders for a specific store- it helps them order an item of their selection without needing any menu or available item lists. They can expect the delivery from stores as per the estimated time.
How UberEats Pay to its Delivery Partners or Drivers?
UberEats devices delivery partners fees into three segments:
1. Pickup fee,
2. Delivery fee,
3. Per mile fee/ mileage fee.
The figure of charge varies from one to another region. If any of the customers offer a tip to the delivery partners, then the total trip will be delivery providers only.
Explore Uber Eats’ Cost-Saving Factors
You might have heard, “Every Money Saved is Every Money Earned”. UberEats, with its unique business model, makes more money than its competitors. Explore some of the cost-saving factors UberEats that UberEats follows:
Lesser Customer Acquisition Cost & Shared Marketing Expenses
The marketing and advertising cost of UberEats is ultimately less as it grabs the attention and benefits of cross-promotion on the Uber App.
Shared Network of Drivers
The drivers of Uber double up the work of the delivery platform. UberEats don’t have to face the issues of setting up a delivery network from scratch as it gets numerous benefits of Uber riders as they deliver the food for the delivery fleet when ideal.
Save on Logistics Costs
Well-defined unit economics helps UberEats to save an immense amount, which has to be invested in logistics cost. The company believed to complete multiple food orders on the same route in a single delivery run.
Primary Source of Income For UberEats
UberEats shares profit from the registered restaurants and the delivery providers. It helps them earn more and keep their apps updated with the latest feature updates.
Profit Shares From Registered Stores
Admin sets the absolute value or profit percentage that stores have to pay. It helps the admin earn more while the stores make money from the online ordering and delivery services.
Providers delivering the ordered parcels to customers also earn a dedicated amount from their completed deliveries. Commissions earned as the delivery service charge from customers get shared between delivery providers and the system admin.
As the food tech sector is booming, it is predicted to become unstoppable in the next few years, and many new startups have made their debut in this industry. However, an experienced player like Uber has entered this market with UberEats business model due to which the competition is quite stiff. Therefore, analyze the business model of UberEats to stand tall and give fierce competition with your UberEats like food delivery apps to increase business reach. Having the support of parent company Uber and an excellent business model, UberEats has many tricks up its sleeves. If you want to follow the same success and want to know how this model works, then feel free to get the demo.