Say you live in London and really want Malaysian food and really don’t want to get dressed, but you can’t find any spots near enough that they’ll deliver.
That’s exactly the problem that Uber Eats is hoping to solve with its new accelerator program. According to Quartz, the food delivery giant is partnering with London shared kitchen space rental company Karma Kitchen to create a program to help strategically-selected restaurants improve operations.
Uber Eats will sift through customer data to identify “selection gaps” — unmet consumer demand for certain cuisines, dishes, etc. — then will pick five to seven restaurants that fill those gaps to participate in the three-week accelerator. During the program restaurants will receive help from Uber Eats to improve a wide variety of operations — everything from branding to staffing to streamlining workflows to speed up delivery times. After they graduate, Uber Eats will ensure that the restaurants receive enough orders to meet basic costs for six weeks (though the article doesn’t outline how it will do so).
This seems to be separate from but related to Uber Eats’ existing virtual restaurant concept, which sets up delivery only restaurants-within-restaurants based off of foods that are rising in popularity. Instead of adding a new type of cuisine to existing restaurants, Uber Eats is finding restaurants that serve an unmet need and teaching them how to get better at delivery (or possibly start doing it in the first place.)
When I first read about Uber Eats’ new program, I immediately thought of Deliveroo’s Editions. Deliveroo Editions is a curated hub of delivery-only restaurants which operate out of shipping container clusters built and operated by the company. Deliveroo gathers data to figure out what cuisines consumers want but don’t have access to, then invites those restaurants to set up shop in one of their Editions parks. Restaurants get low overhead, Deliveroo gets to edge out other delivery services to serve customers exactly what they want.
While it shares the same end goal (closing selection gaps with exclusively signed restaurants), Uber Eats’ new program stops way short of Deliveroo’s offerings. Instead of doing all the work to build out and operate physical ghost kitchens, it simply puts targeted restaurants through an accelerator program. Since it’s partnering with Karma Kitchen, it doesn’t even have to provide space.
It’s a no-brainer for restaurant delivery companies to use data to try and meet unmet consumer demand for certain food types. What’s less clear is if Uber’s strategy to do so through accelerating restaurants will have the desired result.
The program is only three weeks long, which is a pretty short amount of time to teach restaurants how to do everything from effectively staff to pass food hygiene inspections to use accounting software. Then again, these are presumably things that restaurants already know how to do — so maybe the abbreviated timespan is just meant for Uber Eats to help them do these things better?
I’m also curious if there is any sort of follow-up support involved, though it wasn’t noted in the Quartz article. Similarly there was no mention of financial investment. Most importantly, there was clarity on whether or not Uber Eats will have exclusive delivery privileges for participating restaurants post-program, though it would be odd for the company to go to the trouble of creating an entire accelerator if that wasn’t the case. [We’ve reached out to Uber Eats and will update the post if we hear back.]
Deliveroo’s Editions program has a more clear payoff — it gets exclusive delivery privileges for all restaurants in the Editions parks. However, it also has to put in a larger investment. The delivery company has to actually build out physical kitchen spaces, and also manage all operations cost (electricity, gas, etc.). With Editions, Deliveroo also takes on the risk that not all their selected restaurants will do well (though presumably if they don’t Deliveroo can cut them from the Editions lineup).
News of Uber Eats’ accelerator comes as competition in the U.K. delivery space heats up. Now that Amazon Restaurants is out of the game, the biggest remaining players are Uber Eats, Deliveroo, and Just Eat. Uber Eats is, well, Uber Eats, and has all the massive name recognition, data, and funding that comes along with that. It’s also currently piloting ghost kitchens in Paris. But Deliveroo is no slouch: it recently got a hefty investment of from Amazon (though it’s under scrutiny now), and just last week launched a procurement platform to supply its restaurants with discounted ingredients and supplies. For its part, Just Eat has been making acquisitions in corporate catering and restaurant tech, but recently its growth has slowed and earlier today news emerged the company just made a round of layoffs.
If successful, Uber Eats hopes to run the program several times per year. I also wouldn’t be surprised to see the third-party delivery company bring it to the U.S. After all, Uber Eats needs to use every possible weapon in its arsenal to compete against the likes of DoorDash, Grubhub, and Postmates — and, as Deliveroo Editions hasn’t made its way across the pond, filling selection gaps seems a smart way to stand out.