Uber Eats

Last updated

Uber Eats
Company type Subsidiary
Industry Online food ordering
FoundedAugust 26, 2014;10 years ago (2014-08-26) [1] (as UberFRESH)
Founders Travis Kalanick
Garrett Camp
Headquarters San Francisco, California, U.S.
Area served
45 countries, 6,000+ cities
Key people
 Dara Khosrowshahi (CEO) [2]
Services Food delivery
RevenueIncrease2.svg $8.30 billion (2021) [3]
Parent Uber
Website ubereats.com

Uber Eats is an online food ordering and delivery platform launched by the company Uber in 2014. [4] The meals are delivered by couriers using various methods, including cars, scooters, bikes, or on foot. [5] It is operational in over 6,000 cities in 45 countries as of 2021. [6]

Contents

The process of delivering food is carried out by Uber drivers. [7] In 2020, the company was sued for antitrust price manipulation, from forcing restaurants to charge the same price for delivery as for dine-in if the restaurant wants to be listed on the Uber Eats app, along with charging fees of 13–40% of revenue.

History

Uber Eats messenger in Amsterdam, Netherlands UberEats cyclist in Amsterdam.jpg
Uber Eats messenger in Amsterdam, Netherlands
An Uber Eats Motorcycle messenger in Panama City Uber Eats messenger in Panama City.jpg
An Uber Eats Motorcycle messenger in Panama City
Uber Eats sign at a Subway Restaurant UberEatsSubwayRestaurant.jpg
Uber Eats sign at a Subway Restaurant

Uber Eats' parent company Uber was founded in 2009 by Garrett Camp and Travis Kalanick. [8] [9] The company began food delivery in August 2014 with the launch of the UberFRESH service in Santa Monica, California. [10] In 2015, the platform was renamed UberEats [11] and the ordering software was released a standalone application initially launching in Toronto. [12] [13] [14] In 2016, it commenced operations in both London [15] and Paris. [16]

In August 2018, Uber Eats changed its flat $4.99 delivery fee to a rate that is determined by distances. [17] The fee ranges from a $2 minimum to an $8 maximum. [18] In the UK and Ireland, the delivery fee is based on the value of the order. In February 2019, Uber Eats announced that it would reduce its fee from 35 percent of the order's value to 30 percent. [19] As part of its expansion into foreign markets, the company announced its intention to open virtual restaurants in the UK. [20] Sometimes called cloud restaurants or cloud kitchens, these are restaurant kitchens staffed to prepare and deliver food, either for existing brick-and-mortar restaurants wishing to move their delivery operations offsite, or for delivery-only restaurants with no walk-in or dining room service. [21]

In November 2018, the company announced plans to triple its workforce in its European markets. As of November 2018, the company reported making food deliveries in 200 cities in 20 countries in EMEA markets. [15]

In 2019, Uber Eats said it would deliver food to customers by drones from the Northern Hemisphere in the summer of 2019, [22] and partnered with Apple on the release of the Apple Card. [23] In July, Uber Eats began offering a dine-in option in certain cities that allowed customers to order food ahead of time and then eat in the restaurant. [24]

In September 2019, Uber Eats said it would leave the South Korea market, with Reuters attributing this to the amount of competition for food delivery companies in Korea. [25] In October, the company launched a pick-up option. [26] On October 15, 2019, the company said it would deliver Burger King fast food throughout the United States. [27]

On January 21, 2020, Zomato said it would acquire all of Uber Eats's stock in India. As part of the deal, Uber would own 10% stake in Zomato and Zomato would gain all the users of Uber Eats in India. [28] At the time of the deal, Zomato was valued at roughly $3.55 billion. [29]

On January 28, 2020 it was reported that Uber Eats no longer had exclusive delivery rights for McDonald's in the United Kingdom, as the fast food company had partnered with British-based food-delivery company Just Eat. [30] The company had already lost its exclusive delivery rights with McDonald's in the United States the year before. [31]

In March 2020, during the COVID-19 pandemic, Uber Eats saw a 30% rise in new customers, as people avoided social interaction for fear of contracting the virus. [32]

On May 4, 2020 Uber Eats announced they were exiting the United Arab Emirates and that the service would now be through Dubai based vehicle for hire company Careem. The same report stated they were also exiting Saudi Arabia and Egypt. [33] Uber Eats has transitioned its operations to its subsidiary Careem in Saudi Arabia. [34] Uber bolstered its position in July 2020 with the acquisition of Postmates for $2.65 billion. [35]

In December 2021, Uber Eats completed its first food delivery in space when it partnered with Japanese billionaire Yusaku Maezawa to send food to the International Space Station. [36]

On March 11, 2022, Uber Eats added a fuel surcharge to deliveries in the United States and Canada. The new surcharge will be different depending on the delivery length and gas prices in each state. [37]

During the COVID-19 pandemic, Uber Eats has been criticized for charging fast-food restaurants 30% to 35% commission. [38] [39]

In April 2022, Uber Eats partnered with the U.K.'s largest grocer, Tesco, to start in 20 stores and to guarantee delivery of an order within one hour. [40]

On May 16, 2022, Uber Eats launched two autonomous delivery pilots in Los Angeles with Serve Robotics and Motional. [41]

In December 2022, Uber Eats has partnered with Cartken, a self-driving 6-wheeled sidewalk bot, in Miami. The delivery system, originally from Oakland, CA, is set to deliver food and groceries to residents in Miami. Consumers will be alerted when their food has arrived and they will go and retrieve their goods. Cartken and Uber Eats have not yet released how many bots will be in service, nor where they are headed next. [42]

In January 2024, Uber announced it would shut down the alcohol delivery service Drizly by March 2024 in an effort to consolidate their brand in Uber Eats. The company plans to merge the discontinued apps into Uber Eats. [43]

Controversies

Allegations of monopolistic behavior

In April 2020, a group of New Yorkers sued Uber Eats along with DoorDash, Grubhub and Postmates, accusing them of using their market power monopolistically by only listing restaurants on their apps if the restaurant owners signed contracts which include clauses that require prices be the same for dine-in customers as for customers receiving delivery. [44] [45] [46] [47] The plaintiffs state that this arrangement increases the cost for dine-in customers, as they are required to subsidize the cost of delivery; and that the apps charge “exorbitant” fees, which range from 13% to 40% of revenue, while the average restaurant's profit ranges from 3% to 9% of revenue. [44] [45] [46] [47] The lawsuit seeks triple damages, including for overcharges, since April 14, 2016 for dine-in and delivery customers in the United States at restaurants using the defendants’ delivery apps. [44] [45] [46] [47] The case is filed in the federal U.S. District Court, Southern District of New York as Davitashvili v GrubHub Inc., 20-cv-3000. [48] [44] [45] [46] [47] Although a number of preliminary documents in the case have now been filed, a trial date has not yet been set. [49]

Antitrust lawsuit

In 2022, the company is facing a lawsuit for antitrust price manipulation, from forcing restaurants to charge the same price for delivery as for dine-in if the restaurant wants to be listed on the Uber Eats app, along with charging fees of 13–40% of revenue. [50]

Courier pay

Advertisement for the Deliveroo & Uber Eats strike, London, February 2024 Notice on Islington phone box - Join the Deliveroo & Uber Eats strike - seen Feb 2024.jpg
Advertisement for the Deliveroo & Uber Eats strike, London, February 2024

On 14 February 2024, Uber Eats delivery drivers in the United Kingdom went on strike and stopped delivering between 5pm and 10pm as part of a protest organised by Delivery Job UK. [51] The aim of the protest is to raise courier pay to a minimum of £5 per order. [52] The strike is the largest to hit the platform in the UK. [53]

AI Bias

In March 2024, a black Uber Eats courier received an undisclosed sum as a payout from the company after the app's AI-powered facial recognition denied him continued access to the app and later initiated his account's deletion in 2021. The company has been using AI for facial recognition since April 2020 to confirm that drivers' selfies match the pictures that Uber has on record for them, as a form of identity verification. [54] [55]

Finances

YearRevenue
(bil. USD) [56]
20170.6
20181.5
20191.9
20204.8
20218.3

See also

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References

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  44. 1 2 3 4 Allyn, Bobby (May 14, 2020). "Restaurants Are Desperate — But You May Not Be Helping When You Use Delivery Apps". NPR . Archived from the original on May 17, 2020. Retrieved May 20, 2020. Frank points to a clause in the contracts restaurants and the food delivery apps agree to that prohibits owners from charging delivery customers more than people who dine in, even though delivery costs more. "By not forcing those purchasing on apps to bear the whole amount of the fees, instead forcing all menu prices to rise together, in-restaurant diners are effectively subsidizing Grubhub's high rates," said Frank, who argues such an arrangement is anti-competitive and illegal.
  45. 1 2 3 4 Baron, Ethan (April 14, 2020). "DoorDash, Uber Eats, Grubhub and Postmates make restaurant meals cost more: lawsuit - Four firms' rise has 'come at great cost to American society,' suit claims". Mercury News . Archived from the original on April 20, 2020. Retrieved May 19, 2020. Each of the firms uses "monopoly power" to prevent competition, limit consumer choice and force restaurants to agree to illegal contracts that have "the purpose and effect of fixing prices," the suit claimed. ... The four companies give restaurants a "devil's choice" that requires them to keep dine-in prices the same as delivery prices if they want to be on the app-based delivery platforms, the suit claimed. And restaurants must pay commissions to the delivery firms ranging from 13.5% to 40%, the suit alleged. ... Establishments are forced to "calibrate their prices to the more costly meals served through the delivery apps," the suit alleged.
  46. 1 2 3 4 Stempel, Jonathon (April 13, 2020). "Grubhub, DoorDash, Postmates, Uber Eats are sued over restaurant prices amid pandemic". Reuters . Archived from the original on April 17, 2020. Retrieved May 19, 2020. GrubHub, DoorDash, Postmates and Uber Eats were sued on Monday for allegedly exploiting their dominance in restaurant meal deliveries to impose fees that consumers ultimately bear through higher menu prices, including during the coronavirus pandemic. In a proposed class action filed in Manhattan federal court, three consumers said the defendants violated U.S. antitrust law by requiring that restaurants charge delivery customers and dine-in customers the same price, while imposing "exorbitant" fees of 10% to 40% of revenue to process delivery orders. The consumers, all from New York, said this sticks restaurants with a "devil's choice" of charging everyone higher prices as a condition of using the defendants' services.
  47. 1 2 3 4 Dolmetsch, Chris (April 13, 2020). "GrubHub, Doordash Accused in Suit of Pushing Prices Higher". Bloomberg News . Archived from the original on April 19, 2020. Retrieved May 19, 2020. The New York customers, who seek class-action status, say the delivery services charge "exorbitant fees" that range from 13% to 40% of revenue, while the average restaurant's profit ranges from 3% to 9% of revenue, making delivery meals more expensive for eateries. "Restaurants could offer consumers lower prices for direct sales, because direct consumers are more profitable," the plaintiffs said. "This is particularly true of dine-in consumers, who purchase drinks and additional items, tip staff, and generate good will."
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  51. ↑ "Deliveroo, Uber Eats and Just Eat delivery drivers to strike on Valentine's Day - 'it's about the dignity of every worker'". Sky News. Retrieved February 14, 2024.
  52. ↑ "Deliveroo and Uber Eats riders strike on Valentine's Day". BBC News. February 12, 2024. Retrieved February 14, 2024.
  53. ↑ "I deliver food to your door, but not this Valentine's Day. Here's why we are on strike in the UK". The Guardian. February 14, 2024. ISSN   0261-3077 . Retrieved February 14, 2024.
  54. ↑ McCallum, Shiona (March 26, 2024). "Payout for Uber Eats driver over face scan bias case". BBC. Retrieved March 29, 2024.
  55. ↑ Lomas, Natasha (March 28, 2024). "Uber Eats courier's fight against AI bias shows justice under UK law is hard won". TechCrunch. Retrieved March 29, 2024. Uber's facial recognition system — based on Microsoft's facial recognition technology — requires the account holder to submit a live selfie checked against a photo of them held on file to verify their identity.
  56. ↑ Newcomer, Eric (April 12, 2019). "Uber Has a New Growth Story". Bloomberg .
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