Uber, the ride hailing giant, may be receiving heat in different parts of the world due to regulation issues. However, its food delivery subsidiary UberEATS has officially become a global success.

One of the reasons for the success of UberEATS is its network of drivers. It already has a pool of over 2 million drivers which they can also tap to deliver the food.

Reports released in July 2017 say UberEATS experienced growth in 27 cities all over the world. The company is present in a total of 108 cities. The data revealed that UberEATS has made 24% more deliveries between March 2016 and March 2017.

As a food delivery company, UberEATS serves as a third-party delivery service partnered with various restaurants and food establishments. It was a bold idea that caught up quickly and was fully embraced by a market that’s after convenience and saving time when buying food.

The experience of working with UberEATS became an eye-opener for restaurant owners. Many experienced an overwhelming surge in orders and delivery requests. The orders are placed and paid for online, using either the mobile app or on the computer via the company website.

Its popularity in extremely developed cities like Tokyo, Seoul, Taiwan, and Taipei is a testament to how much people are now dependent on technology for everything.

UberEATS IPO?

UberEATS’ chief executive Dara Khosrowshahi is confident that the company’s expansion will continue. Unlike the ride-hailing app which is experiencing major challenges in densely-populated cities, UberEATS is readying itself for an initial public offering. The CEO said it could be as soon as 18 to 36 months given the growing trend towards food delivery.

Graphic of profits of UberEATS

Global Management and Consulting firm McKinsey pegged the food delivery industry as worth $100 billion, making up about 1% of the overall food market. The competition here is very cutthroat, especially since retail giant Amazon has decided to join in on the fray.

There are two types of food delivery companies: aggregators and full delivery services. UberEATS belongs to the latter type; it takes orders via an online portal and then delivers the food to various patrons. Apart from earning from the add-on charges for the delivery, the company also earns a fixed amount from the restaurants or food establishments.

The aggregators, for their part, just collate menus and options and post them at an online portal. The orders are collated and made to the establishment, but the actual orders are still delivered by the restaurants. So essentially, it saves the customer the hassle of looking for and calling the restaurant themselves. In a way, you can consider UberEATS as an end-to-end service provider.

Grubhub is one of the closest competitors of UberEATS and has registered $3 billion in food sales in the year 2016. It has an estimated fan base of 8.17 million customers.

UberEATS, on the other hand, started in 2014 in Los Angeles, CA. Its original name was UberFRESH; back then they offered pre-packed lunches and dinners from different restaurants. There were issues about freshness and food safety, so the name was eventually changed to UberEATS and was relaunched in Toronto, Canada in December of 2015. The service became a hit and the division worked hard to bring in more partner establishments and restaurants.

One of the reasons for the success of UberEATS is its network of drivers. It already has a pool of over 2 million drivers which they can also tap to deliver the food. Basically, the delivery partner arrives at the restaurant, picks up the freshly cooked food, and then delivers it to the customer within minutes using their bike, car, or scooter, or even on foot.

With these last mile logistics firmly in place, UberEATS is setting the pace for what food delivery should and would be like in the future.

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