Delivering Delicious Food: A Look at UberEats Business Model

Gone are the days when getting a doorstep food delivery from a favorite restaurant was a nightmare. We no longer need to roam around the streets, call restaurants for menus, and inquire whether they deliver food. We don’t even remember the address, contact number, or other related things. All this- and much more, with the advent of online food delivery apps such as UberEats, Zomato, GrubHub, etc., through which users can browse restaurants, check info, place an online order, and get them delivered to their doorsteps with real-time tracking features.

UberEats, an emerging food delivery app, is one such venture that has disrupted the on-demand or gig economy with its unique business model, Uber. After enjoying the success of the online ride-booking service, Uber has introduced UberEats, another hyperlocal business model that allows customers to order food from local restaurants and get it delivered to their doorsteps in no time.

So, how does UberEats work? How does UberEats make money from its food delivery business? Is Uber Eats’ business model similar to Uber’s online ride-booking business? Hold on; we will answer all these questions in our detailed blog. We will learn everything about Uber Eats’ business model, so let’s get started with the basics.

What is UberEats?

Uber Eats is an online food delivery platform launched by Uber in California in 2014. Later, the platform was launched in Australia in 2016, and since its launch, more than 5000 restaurants have partnered with it.

Using the Uber business model, the American food delivery giant launched UberEats, which follows the same business model for operations and offers similar features to all stakeholders: customers, restaurants, and drivers.

• Company Name: UberEats
• Company type: Subsidiary of Uber
• Founded: 26th August 2014 (earlier known as UberFRESH)
• Founders: Travis Kalanick, Garatte Camp
• Headquarters: San Francisco, USA
• Operates in 45 Countries, 6000+ cities
• Parent: Uber
• Website: ubereats.com

How Does UberEats Work?

With the help of UberEats, it’s straightforward to browse restaurants and place an online food order. Whether you are craving your favourite dish or want to explore new restaurants, UberEats brings meals right to your doorstep with just a few clicks on your smartphone.

Now, let’s have a look at the simple steps from the user’s point of view to check how UberEats works:

1. Install the UberEats app from the Play Store or the Apple Store, depending on the type of phone you own and register. This can be done using a secondary email address or phone number or linking your existing Uber account.
2. Let the app use your current location to pinpoint restaurants that deliver or input your postcode.
3. Select a restaurant from a list of outlets offering food delivery services around the same area. It is possible to filter the restaurants by cuisine, price level, and special diets.
4. Double-click the restaurant icon to see the food it offers. Choose various categories such as appetizers, main courses, deserts, etc.
5. Choose foods to be delivered and then customize them the way you want. (e.g., toppings, side orders, spiciness).
6. The next step is to add the chosen items to the cart and then check the items in the cart to see if everything is okay and correct.
7. Go to the checkout, where you can choose the most appropriate payment option, including credit/debit card, PayPal, or Uber credits.
8. If you have a promo code, you can also type it here to apply the available discounts.
9. Now, you can see whether the restaurant has accepted your order, when it prepares your food, and when the courier collects it.
10. When your food is en route, monitor the status of the delivery provider on the map. You will get notifications when your order is expected to be delivered.
11. Specifically, after the delivery of your order, you can share your experience and give feedback within the application. This helps UberEats in its operations and informs others of your experience at the restaurant.

UberEats helps you place an order in the shortest time possible; you get to order your favourite meals from restaurants, and they will be delivered to your doorstep. It is easy to use and has real-time tracking; therefore, it is the best way to fulfil your cravings in the comfort of your home.

UberEats Business Model: From Start to Finish

Since its launch, the technology-driven business model of UberEats has inspired many other entrepreneurs to have an UberEats clone app to streamline their online food delivery business operations. The UberEats app plays a dual role: first, it works as an aggregator and a delivery partner.

• UberEats employs an aggregator model that lists all the restaurants within the app. This allows customers to place an order online.
• The company also offers logistic support to the restaurant as delivery providers collect the order from the restaurant and deliver it to customers. This is a boon for restaurants that lack adequate resources but want to offer online services to customers.

Much more must be included when discussing the business model. So, let’s look at each aspect of the UberEats business model.

Stakeholders

As we know UberEats’s business model consists of three main stakeholders – Customers, restaurants and drivers. What role does each stakeholder play? What value does the platform offer to the platform? Let’s have a look at them.

Customers

• Segmentation: UberEats appeals to consumers who want a convenient way of delivering their food to their doorsteps within the shortest time possible. This is compounded by working people, students, parents with kids, and others who require a wide range of meals prepared quickly and delivered to their doorsteps.
• Value Proposition: The values include convenience, variety, and reliability in providing food products to customers. Uber Eats is a food delivery service that allows orders from numerous restaurants, has practical and straightforward charges, has the feature to track orders, and has easy means of payment, all of which improve the dining experience while sitting at home.

Restaurants

• Segmentation: UberEats collaborates with different restaurants, including mom-and-pop stores, cafes, multi-cuisine restaurants, fast-food chains, and exotic restaurants.
• Value Proposition: UberEats collaborates with different restaurants, including mom-and-pop stores, cafes, multi-cuisine restaurants, fast-food chains, and exotic restaurants.

Delivery Providers (Drivers)

• Segmentation: UberEats contractors have a vast number of independent and independent contractors who deliver food using their vehicles or bicycles.
• Value Proposition: Drivers are private contractors who enjoy flexible work schedules, the freedom to determine their income-generating time, and Uber’s provision of efficient order dispatch and location-finding technology.

UberEats Platform

• Value Proposition: UberEats does not sell food but provides the platform to enable interactions between customers, restaurants, and delivery partners. The technology then allows for proper order handling, routing, and tracking to facilitate an efficient delivery cycle.

Customer Relationships

• Customer Service: Responding to customers’ questions, problems, and concerning issues regarding orders, refunds, etc.
• Personalization: Special offers and recommendations based on their choice, as well as previous orders.
• Feedback: Collecting and managing customers’ feedback for the enhancement of service delivery.

UberEats has changed how people order food online and deliver it right to their doorsteps using technology and an extensive network of vehicles. Considering the customers, restaurants, and delivery providers, it remains a market leader and has increased its presence worldwide.

How Does UberEats Make Money?

As mentioned, UberEats operates in over 6000+ cities worldwide and has a network of more than 8,25,000 restaurant partners. The UberEats business model generates revenue from various sources, including commission from restaurants, customer delivery charges, and advertising income from restaurants looking to expand their user base.

Commission on Each Food Delivery Order

UberEats allows customers to order food online from their favourite restaurant and deliver it to their doorsteps. UberEats charges a commission percentage on every order delivered. The commission ranges from 20% to 30% but UberEats revealed that they charge an average commission of 30% of the total order value without sales tax and driver commission fees.

Delivery Charges

On each successful order, UberEats charges a delivery fee to the customers. This fee goes to the delivery providers, which means drivers, but the company charges a small fee, increasing UberEats’ overall revenue.

Advertising Fees

UberEats allows restaurants to promote their services on the platform, reaching more customers and boosting their visibility in search results. Restaurants can get started with promotional ads to reach more customers.

Surge Charges

The platform charges customers an extra fee during working hours. The surge charges are added to the delivery fee, which may increase the base delivery fee to 3X of the order value. UberEats ecosystem has a unique algorithm that allows the company to identify busy hours, zones, etc., which helps them to increase charges accordingly.

There are a few simple ways that keep increasing the revenue of UberEats. This UberEats revenue model is quite exciting and can help the company to stay ahead in the competitive food delivery market.

How Much Does It Cost to Build an App Like UberEats?

UberEats has made valuable strides in revamping the online food delivery industry. The sudden pandemic has skyrocketed the demand for online food delivery. This is a high time for restaurants to make a mark in the online food delivery market. As we now know the business model of UberEats, building an app like UberEats with the necessary features helps entrepreneurs stay ahead in the saturated market.

Building an app similar to UberEats from scratch is a long process and requires a lot of investment and time. Besides, using a readymade or white-label Uber Eats clone platform cuts time and helps business owners hit the market quickly. Moreover, this readymade solution also comes with many customization and branding features that allow entrepreneurs to stand tall in the fiercely competitive market.

Final Thoughts

UberEats has changed the conventional food delivery landscape. No more making phone calls and waiting around for orders that take hours to reach. UberEats is a prime example of how businesses can capitalize on the online food delivery industry. By leveraging its business model, UberEats has generated decent revenue through commission and advertising fees.

If you are also thinking of entering into the online food delivery sector and developing an app like UberEats, contact us, we will assist you in developing and deploying the robust and feature-rich UberEats like app to woo customers and restaurants in new ways.