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Daily news and analysis about the food tech revolution

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Uber, DoorDash and Others ‘In Talks’ to Compensate Drivers Affected By Coronavirus

Under pressure to offer more protection to workers, major gig economy companies are considering setting up a fund to compensate drivers affected by the coronavirus, according to The Wall Street Journal. Uber, Lyft, Instacart, DoorDash, and Postmates are “in talks” to see how they can come together to set up a fund to pay workers infected by or quarantined with the virus.

Food delivery drivers are in high demand right now as more Americans are working from home or simply staying away from restaurants in the wake of the COVID-19 outbreak. Postmates and Instacart have responded by implementing contactless delivery options where drivers simply leave food on the doorstep instead of handing it off directly to the customer.  

Those measures mitigate some risk. However, they don’t account for the fact that gig economy workers are classified as contractors in most states, which means they don’t get paid for time off, including sick leave. In some cases, taking time off for illness could drastically affect workers’ livelihoods. One worker told the WSJ that “staying home won’t pay the bills.”

That puts delivery drivers in a tough position: stay home and miss earning essential income, or work even when you’re feeling sick and potentially risk further spreading coronavirus. While this conundrum is true of many, many types of workers right now, gig workers are in especially high demand as more people order food in, rather than go out to restaurants. 

The aforementioned companies are expected to make a decision about this potential fund in a few days.  Uber has already said it will compensate up to 14 days for both rideshare drivers and delivery drivers diagnosed or quarantined with coronavirus.

Compensating affected drivers is just one of many issues around worker treatment for which delivery companies have come under fire recently. Uber, Lyft, and Postmates are on the list of gig economy companies currently fighting California’s Assembly Bill 5 — also known as the “gig worker bill” — which reclassifies those workers as employees and entitles them to certain benefits — including paid sick leave. DoorDash and Instacart famously made a lot of enemies in 2019 over their worker tipping policies. Meanwhile, advocacy groups like Gig Workers Rising and Gig Workers Collective are putting pressure on tech companies to enact better labor policies.

One possible result of the current outbreak is that it could prioritize the issue of gig workers’ rights and spur both regulators and tech companies into action faster. Coronavirus isn’t the last public health crisis we’ll see in our lifetimes. As gig economy jobs become the norm for a growing number of the population, ensuring better protection for workers’ health needs to be built right into the job description. 

California Labor Law Remains for Now as Judge Denies Uber and Postmates’ Injunction

A California labor law that reclassifies gig workers as employees rather than contractors will remain in place for now, as a federal judge yesterday rejected a request from Uber and Postmates to prevent the law from taking effect.

Gig economy companies are vociferously against California’s AB 5 law, and on Dec. 31 of last year, Uber and Postmates filed their complaint, which my colleague, Jenn Marston reported on at the time saying:

The complaint, filed Monday in a U.S. District Court, argues that AB 5 violates multiple clauses in the U.S. and California constitutions, including equal protection. The suit points to the “laundry list” of occupations exempted from AB 5, which includes travel agents, grant writers, construction workers, and salespeople, and argues that AB 5 is designed to stifle gig-economy companies and their workers.

According to The New York Times, Judge Dolly M. Gee agreed that Uber and Postmates could face harm from the law, but the public interest in having living wages and regulating employment were more in the public interest. Judge Gee did not rule on the merits of the case.

At stake is the underpinning of gig economy model, which uses less-expensive contractors and not full-time employees for jobs like doing the actual delivery of food. The question over the viability of this model will become increasingly important as delivery from third-party services is expected to make up 70 percent of all food delivery by 2022.

Companies like Uber, Postmates and DoorDash are all under increased pressure from investors to become profitable. Laws like California’s AB 5 certainly complicate that path to profitability.

Yesterday’s decision does not mean the fight over AB 5 is over. Postmates and Uber both said they are considering an appeal of the judge’s decision. In addition to this court case, DoorDash, Uber, and Lyft have pledged $90 million to get a 2020 ballot measure passed that would counteract AB 5.

Uber and Postmates File a Lawsuit Claiming AB 5 Is Unconstitutional

With California’s Assembly Bill 5 (AB 5) law set to go into effect on January 1, Uber and Postmates have filed a complaint alleging that the new law, which will make it harder for gig economy companies to classify workers as independent contractors, violates constitutional rights.

The complaint, filed Monday in a U.S. District Court, argues that AB 5 violates multiple clauses in the U.S. and California constitutions, including equal protection. The suit points to the “laundry list” of occupations exempted from AB 5, which includes travel agents, grant writers, construction workers, and salespeople, and argues that AB 5 is designed to stifle gig-economy companies and their workers.

“[AB 5] irreparably harms network companies and app-based independent service providers by denying their constitutional rights to be treated the same as others to whom they are similarly situated,” the lawsuit says.

The complaint alleges that AB 5 also violates due process clauses of the Fourteenth Amendment, the Ninth Amendment, and the contracts clause of Article I. It asks for a preliminary injunction against AB 5 while the lawsuit is considered.

AB 5, which expands on a California Supreme Court decision from 2018 known as Dynamex, was signed into law in September by California governor Gavin Newsom. Under the new law, workers are considered employees of a business unless the employer can show they meet certain criteria that would classify them as independent contractors.

The new law would require gig-economy companies like Uber, Postmates, and other food delivery services to give drivers and couriers health insurance, paid time off, and other perks not typically only given to full-time employees.

It would also undercut the entire model on which these companies are built — a model many already call unsustainable for the long term. By some accounts, third-party services will make up 70 percent of all restaurant delivery orders by 2022. But these companies have yet to turn a profit. If AB 5 causes a ripple effect across other states who would sign similar laws into place, it could further erode the possibility of profitability ever happening.

DoorDash, Uber, and Lyft have pledged $90 million to get a 2020 ballot measure passed that would counteract AB 5.

What Does Travis Kalanick’s Departure from Uber Mean for the Cloud Kitchen Space?

Just before Christmas, it was announced that Travis Kalanick, the founder and former CEO of Uber, will be leaving that company’s board of directors at the end of this month. Additionally, Kalanick has reportedly sold all of his Uber stock for roughly $2.7 billion.

In the press announcement, Kalanick said “it seems like the right moment for me to focus on my current business and philanthropic pursuits.” One of those business pursuits is CloudKitchens, his secretive startup that does exactly as its name implies; it creates physical kitchen infrastructure locations for delivery-only restaurants. These restaurants can be delivery extensions of existing brands, or virtual restaurants that exist only within a delivery app. CloudKitchens is even creating their own virtual restaurants.

Kalanick’s new calling, however, created a conflict of interest for him and Uber given that Uber Eats has its own potential cloud kitchen and virtual restaurant ambitions. So Kalanick’s departure from Uber’s board isn’t a huge surprise.

As for why Kalanick sold off all his shares in the company he helped build into the juggernaut it is today, who knows exactly what message he is trying to send. Has he lost faith in Uber, which continues to hemorrhage money? Did Kalanick pull a Steve Jobs in selling off shares from the company that ousted him?

What we are more interested in here at The Spoon is what Kalanick is going to do next with CloudKitchens now that he has a bunch of cash and time to focus on it. The cloud/ghost/dark kitchen landscape is one that we watch closely (check out our market map on the topic). CloudKitchens already reportedly raised $400 million from Saudi Arabia’s Public Investment Fund, so money wasn’t necessarily an issue for the startup. Especially considering that rivals like Kitchen United and Virtual Kitchen Co. have only raised $50 million and $15 million respectively.

Kalanick has proven his ability to ruthlessly build an empire before. Freed from any ties to Uber, we’ll now be watching to see how quickly Kalanick expands CloudKitchens. Will he relax the CIA-like levels of secrecy around the company? Will he expand rapidly across the country? Will he launch any new innovations? How will he spur his rivals into action?

One thing is for certain; we’ll be writing a lot about Kalanick and cloud kitchens in the coming year.

Newsletter: Third-party Food Delivery Keeps on Fighting, But Its Opponent Is Getting Stronger

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It’s getting to be that time when us journalists haul out the predictions for the coming year. You can be sure we here at The Spoon will have plenty of those in the coming weeks. And you can be sure some of them will center around the how the food delivery model could change in the wake of the many controversies its currently mired in. Exorbitant commissions for restaurants, antitrust accusations, paying workers a wage they can’t live on — all this and more (did I mention plummeting stock?) underscores the same point: the third-party food delivery model is unsustainable, far from profitable, and larger swaths of the entire food industry are starting to push back. Hard.

Another log went on that fire last week when online grocery fulfillment platform Instacart cut bonuses for its Shoppers — that is, the folks getting groceries off the shelf and delivering them to customers’ houses. Oh, and it just so happened that this cut, which can reportedly account for up to 40 percent of some Shoppers’ earnings per order, came just days after said Shoppers instituted a protest over previous changes to their pay.

Instacart says the new pay cut is “not a form of retaliation.” Whether that’s completely true or not seems irrelevant. It’s a bad look for Instacart, who, along with DoorDash and Postmates, already came under fire earlier this year for its worker-tipping policy.

Then there’s the fight over AB 5, California’s so-called “gig worker bill,” which was signed into law recently and reclassifies gig workers as actual employees. Instacart is not in on that fight, but DoorDash, Uber, and Lyft are, and they’ve vowed to spend $90 million in 2020 to get a ballot measure passed that would counteract AB 5. Talk about a bad look.

Plus, even if these companies overturn the protections laid out in AB 5, they will still face an endless series of new bills, laws, and regulations that will undercut their core business model and further put the question of profitability in question. Meanwhile, investors are getting antsy, and restaurants themselves are starting to take pieces of the delivery chain, from branding to retaining customer data, back in-house, further eroding the reach of third-party delivery.

Instacart, DoorDash, Uber, and others can fight all they want, but their opponents are getting undeniably stronger. Grab your (delivered) popcorn and sit back. The battle is far from over.

Food Delivery Services Pile On New Features
One fighting tactic for food delivery services is far simpler than pledging tens of millions of dollars to fight legislation: pile on the features in the hopes of attracting more customers and restaurant partners.

This week, Deliveroo announced a pickup feature that lets customers order food via the app then collect it themselves, bypassing the delivery fee on the way. The move could appeal to more cost-conscious folks. Customers ordering food might not want to pay a $5 delivery fee for a restaurant that’s a three-minute walk away. And some restaurants could find the option appealing as it would allow them to work with these off-premise order platforms but pay them slightly lower commission fees.

Uber Eats also recently announced some discounts for its restaurant parters — specifically those who use the Ordermark system, which funnels delivery orders from different third-party channels into the restaurant’s main POS system. Ordermark restaurant customers who sign up to use Uber Eats through the Ordermark platform will receive discounted rates.

Eats is also selling ad space inside its platform to restaurants. “If we have all the restaurants on the marketplace and we give them tools to help them grow, then this will be a very efficient marketplace,” Uber told TechCrunch.

The Robots Are Coming (For Your Food Order)
In another likely scenario for the future, we won’t need a gig economy because the robots will do it all.

At least, they’ll be able to do an awful lot of peddling restaurant and grocery deliveries to customers’ apartments and houses. With delivery robots roving around college campuses, some cities, and now Russia, it’s possible — nay, inevitable — that delivery services will render the debate over human workers pointless by replacing said humans with these six-wheeled bots.

So too will autonomous vehicles. Amid far more controversial statements this week, Uber’s CEO Dara Khosrowshahi’s said autonomous ride-hailing is probably five to ten years off, and that there will be some autonomous driving going in just three to five years for simple tasks and routes.

Writing about the Uber news, my colleague Chris Albrecht points out that “food delivery certainly seems like it could fit the bill when it comes to simple tasks and routes” and that autonomous vehicles nix the cost of human drivers. But he also rightly notes that “this displacement of human labor brings up its own societal issues.” Which means robots and autonomous vehicles could potentially resolve some of the fight around the gig economy, but they’ll open up a fresh can of worms when it comes to the ethics of the food delivery model.

Uber CEO: “Some Version” of Autonomous Driving for Simple Tasks Coming in 3 to 5 Years

Uber CEO Dara Khosrowshahi’s comments on Saudi Arabia are rightly grabbing most of the headlines today, following his televised appearance on Axios on HBO this weekend. But during that interview, Khosrowshahi also said some things about Uber’s autonomous driving future which are worth at least noting.

Axios posted an unaired clip from that interview and in it, Khosrowshahi says that full autonomous ride-hailing is probably five to ten years off. However, he thinks that for very simple routes and tasks, there will be some form of autonomous driving going on in just three to five years.

Uber CEO Dara Khosrowshahi talks autonomous vehicles

Though he doesn’t mention Uber Eats specifically in the clip, food delivery certainly seems like it could fit the bill when it comes to simple tasks and routes. As Khosrowshahi points out, safety is still a huge issue for autonomous vehicles. On its face, carrying food instead of people is at least a little bit safer, because there is no one inside the self-driving vehicle who can get injured. (Obviously it still needs to be safe for pedestrians and other people out in the world.)

Also carrying food is a much simpler task than carrying a person, who may not be at a pickup point, or might want to get dropped off at a particular spot, or could even barf in the backseat of a car.

Uber could also create simple, autonomous routes for food delivery, similar to the hub and spoke model we talked about with Uber’s upcoming drone delivery. If Uber builds out more centralized ghost kitchens that host a number of different restaurants, food ordered from those restaurants could be bundled together into an autonomous vehicle that drives along a simple route to a drop-off point in a neighborhood where drivers pick it up for last mile delivery. This autonomous middle-mile is something that Walmart is already exploring to move goods between Walmart stores.

Autonomous vehicles also eliminate the cost of human drivers, so they would be cheaper to operate than Uber’s current fleet. This displacement of human labor brings up its own societal issues, and Uber is already in the hot seat for how it classifies its drivers. Uber is going to have to sort all this out because three years is not that far away.

Thanks to Uber and Lyft, Rideshare and Restaurant Experiences Are Becoming Inseparable

More and more it’s looking like food-related programs are what will help rideshare companies generate more loyalty from both drivers and customers. At least, that’s what Uber and Lyft would have us believe with their respective activities of late, which have been heavily focused on merging rideshares and restaurants into a single experience. And news from Uber today only emphasizes that fact more.

Uber announced this morning a nationwide expansion of its rewards program for food delivery couriers, Uber Eats Pro. The program, which is currently in beta, lets those delivering food via Uber Eats earn points and unlock rewards that include cash back on gas, roadside assistance, some car maintenance costs, and even college tuition. As of now, Pro is available in more than 200 cities to Uber Eats workers, according to an email sent to The Spoon.

Upon signing up with the Uber Eats Pro program, drivers and cyclists automatically become a partner. With each delivery a person makes, they earn points that help them unlock rewards from Uber. Those who maintain a 95 percent or above satisfaction rating from restaurants and customers can achieve different status levels to unlock bigger rewards over time, like roadside assistance and 100 percent tuition coverage at Arizona State University Online. Uber has also partnered with Subway to provide daily refreshments, from drinks to sandwiches, which also increase with a Pro user’s status.

More than anything else, Pro’s expansion seems to be aimed at enticing gig workers to stay loyal to the Uber ecosystem, much as any company uses so-called perks to woo employees. With Pro, the more orders a courier delivers, the closer they get to the more substantial rewards like college tuition. Taking time to make a delivery for a rival service, like Lyft, would only slow down that goal.

Not that Lyft is standing still. That service may not have its own food delivery wing, but it is starting to offer its own set of initiatives for food service workers, too. Last week, Washington, DC-based fast-casual chain &pizza unveiled its Lyft for Late Nights program, which offers &pizza employees discounted rides late at night. On Fridays and Saturdays between 11 p.m. and 5:30 a.m., &pizza employees can take a Lyft for a flat fee of $4.50.

Though the program is still in test phase and only available at seven locations currently, it’s another example of rideshare companies and food-oriented companies coming together to offer workers more perks that keep them happy on the job and locked into the rideshare ecosystem.

This tactic of using perks to increase loyalty isn’t just for workers, either. Both Uber and Lyft have tested initiatives in the past that offer perks to diners that ultimately would keep them tied to that particular rideshare service. In 2017, Lyft attempted a partnership with Taco Bell for the ill-fated Taco Mode program, where users could hit the restaurant chain’s drive-thru en route to another destination.

More palatable have been Uber’s efforts of late. In April, the company announced Uber Vouchers, a program designed to get more foot traffic into restaurants by essentially helping rideshare users to pay for their trip to the restaurant. In September, Uber said it would merge Uber Eats and its main app.

Integrating food — a vital part of life — more deeply into these services would seem like a surefire way to attract more customers. As the outdated saying goes, the way to a man’s heart is through his stomach.

But all these efforts also come at a time when rideshare companies still struggle with profitability. On its most recent earnings call, Uber posted $5.2 billion in losses. Lyft, too, is still hemorrhaging money. Meanwhile, the fight over AB 5 in California, which would reclassify gig workers as employees and upset the entire business model, is hotter than a five-alarm fire. Whether adding more perks for customers and employees can douse flames that high remains doubtful.

Uber Acquiring Majority Ownership of Grocery Delivery Startup Cornershop

Uber announced today that it is acquiring a majority ownership of Cornershop, an online marketplace for on-demand delivery from supermarkets across Chile, Mexico, Peru and Toronto. The deal is expected to close in 2020, and Cornershop will continue to operate with its current leadership. Cornershop has so far raised $31.7 million in funding.

Uber CEO Dara Khosrowshahi has said before that grocery delivery is an area he wants the company to get into. Grocery delivery is already a pretty crowded field here in the U.S., with Walmart, Amazon and Target all offering same-day service, not to mention startups like Instacart, DoorDash and Postmates establishing their own services. While online grocery shopping remains a tiny 6 percent of the overall grocery shopping market, in 2019 it grew 15 percent year-over-year. As delivery becomes more widely available, you can expect that number to increase.

Uber has been working to stop hemorrhaging money this year. The company reported losses of $5.2 billion during its third quarter this year and has said that profitability for Uber Eats is still far off. Last month the company merged Uber Eats into its main ridesharing app, and said it wants to become the “operating system for your everyday life.” Groceries are certainly a part of everyday life.

The Cornershop acquisition also shows how Uber is adjusting its global business. The company recently partnered with Japanese convenience store chain Lawson for food delivery, but also pulled Uber Eats out of the South Korean market facing competitive pressures in that country. The addition of Cornershop to its quiver will now obviously bolster its presence across Central and South America.

The deal still needs to close, however. We’ll see if Uber has better luck than Walmart, which tried to acquire Cornershop last year in a deal that fell apart after running into issues with Mexican regulators.

Uber to Merge Its Rideshare and Eats Apps, Partners With Rachel Ray for a Ghost Kitchen

At its event yesterday in San Francisco, Uber unleashed a slew of announcements and updates to its app, including merging Uber Eats into its main rideshare app, expanding its rewards program, and several other improvements geared towards bolstering the presence of Uber Eats in customers’ everyday lives.

Of all the food-centric news to come out of the event, what’s most interesting to us over here at The Spoon is Uber’s continued focus on ghost kitchens. The company announced yesterday it has teamed up with Rachel Ray to open a virtual restaurant whose menu will only be available on Uber Eats.

A blog post from Uber offered some details, though not a ton. The limited-time “restaurant” will run for 10 weeks in 10 cities and be timed with the launch of Ray’s new cookbook. Uber didn’t specify which cities and exactly when the launch will happen, but presumably the food will be cooked in one of the company’s growing number of ghost kitchens and delivered out to customers in a nearby radius.

The initiative highlights a new trend we’re seeing more of in ghost kitchens, which is using them to launch non-restaurant concepts that would be prohibitively expensive to test out in a traditional brick-and-mortar setting. Uber isn’t alone in this new arena: Grubhub has already launched two such initiatives, including a partnership with food publication Bon Appétit, which was announced earlier this week. Partnerships with big-name chefs seem a logical next step, and while the Uber-Rachel Ray deal is for a very limited time, it’s likely the first in what will be a long string of similar partnerships in future.

Rachel Ray wasn’t the only deal announced at the event yesterday. Uber Eats also unveiled an exclusive food delivery partnership with fast-casual chain Sweetgreen. Interestingly, the announcement comes the same week Sweetgreen closed a $150 million funding round and said it will launch its own in-house delivery service.

Uber made multiple other announcements yesterday that will affect Eats, including the news that it will merge its food delivery app into its main ride-hailing app. This “next generation of the Uber app,” as the company called it in a blog post, is currently testing two different versions of this new interface in “hundreds of U.S. and international cities.”

The company also highlighted allergy-friendly filters, which will let Eats customers communicate more effectively with restaurants about their dietary restrictions, and its forthcoming plans to make extras like cutlery and straws available only upon request.

With growth of its ride-hailing service stalling, including less-than-stellar earnings reports from Q2, it makes sense Uber is continuing to focus on its Eats business, though that business has yet to become profitable, either, and, as Uber CEO Dara Khosrowshahi noted on the Q2 earnings call, won’t be for some time. Whether celebrity chefs and allergy filters can actually make any real progress towards changing that remains doubtful.

WoodSpoon’s Soon-to-Launch Service Aims to Bring Home-cooked Food Delivery To NYC

Someone else’s kitchen could be the next place cooking up your food delivery order thanks to a soon-to-launch service called WoodSpoon. Set to begin service on September 16 in NYC, the service is an on-demand delivery marketplace for homemade meals as well as a platform for local cooks.

WoodSpoon CEO and co-founder Oren Saar, who moved to the U.S. from Israel to do a Masters degree at MIT four years ago, got the idea for WoodSpoon in 2016 after a roommate said he preferred Saar’s cooking to any option he might find on Grubhub, Caviar, or other food delivery services. Speaking over the phone this week, Saar told me he had a “white light” moment then as he realized there could be serious demand for people wanting to order homemade meals from local cooks.

He’d be the first to say the idea wasn’t completely original — plenty of companies have tried over the last several years to launch delivery businesses for home-cooked food, including Danny Meyer’s Umi Kitchen, HomeFood in the UK, and FoodByUs in Australia. Saar says he reached out to these and others to better understand the business he was trying to break into: what worked, what didn’t, why these companies eventually shuttered or pivoted towards other directions, and how he, along with his WoodSpoon cofounder and company CMO Merav Kalish Rozengarten, could do things slightly different. “We really based our entire product on the experience that others had before us,” says Saar.

The WoodSpoon platform is made up of two different apps, both developed in-house and available on iOS and Android platforms. The customer-facing app functions like most food order and delivery apps out there: users search for meals, order, and pay within the app. What’s available in terms of food depends on which cooks in the area are working at that moment, which means options for users change on a daily basis.

Currently, WoodSpoon has 30 cooks signed up to its platform, a mix of professional chefs with culinary degrees those who hold other jobs but enjoy cooking for others in their off hours. Saar himself is one of the the latter.

To find cooks, WoodSpoon relies on both those who apply directly to the company and channels like Instagram. “We’re looking for people that have really good rankings with good reviews,” says Saar. Anyone is welcome to apply; all are carefully vetted through a rigorous process that includes interviews, an evaluation of the food itself, and a kitchen inspection to ensure cooks are properly equipped and licensed to meet restaurant safety standards in New York. With legalities around home-kitchen food businesses in NYC somewhat nebulous, many of WoodSpoon’s cooks actually use their own commercial kitchen facilities to make the food.

Cooks manage all orders via a separate app and can decide to accept or pass on an order much the way an Uber driver takes passengers. Once an order is accepted, an onscreen timer tells the cook how much time they have to complete the order and package it up. (WoodSpoon provides packaging materials.) As that’s happening, the system talks to a delivery person (right now, WoodSpoon contracts its own drivers), who will know when to arrive at the cook’s space to retrieve the order and take it to the customer. Cooks set the price of each dish as well as the delivery fee, and WoodSpoon takes a commission on each order.

According to Saar, the hope is that users develop an affinity for a certain cook or type of food and re-order with the same loyalty they might have for a favorite local restaurant. “Our entire mission is to empower local cooks to share their food with others,” he says. “Once you get to the know them, you [will] want their food.”

The home-chef-as-a-business model may not be new, but it is only just starting to gain traction here in the U.S. Even in a densely populated metropolis like NYC, WoodSpoon won’t face a ton of competition when it launches in a few weeks. How quickly the concept catches on will depend on each state’s individual regulations around selling home-made food commercially. California, for example, green-lighted a home food bill in 2018, but in other states the practice is still illegal.

To start, WoodSpoon will be available in Manhattan’s East Village and West Village neighborhoods, with expansions planned for the near future, both within NYC and to other parts of the country.

Uber Q3: Uber Eats Grew 140 Percent Year Over Year, Has 320,000 Restaurant Partners

Uber had a bummer of a Q2 earnings call, with the ride logistics company reporting $3.17 billion in revenues but $5.2 billion in losses for the quarter. While the overall health of Uber is something we keep tabs on, The Spoon is more interested in its Uber Eats division, which generated $3.9 billion in gross bookings.

While that figure missed analysts’ projections, there was some good news accompanying it. From Uber’s earnings release:

In Q2 2019, Uber Eats Monthly Active Platform Consumers (MAPCs) grew over 140% year-over-year. Over 40% of new Eats consumers had never used Uber’s platform before. Uber Eats restaurant selection continues to improve, reaching 320,000 restaurant partners at the end of Q2 2019. New delivery fees (service and small-basket fees) resulted in improved Adjusted Net Revenue take rates quarter-over-quarter.

Uber CEO Dara Khosrowshahi provided this good news/bad news quote to CNBC during the call:

“The Eats business is still a business that carries very significant growth going forward and that continues to attract a lot of capital. Not just in the US, but all over the world. With the eats business there’s a lot of capital chasing a lot of growth and we’re the leader on a global basis. So, I don’t expect that business to be profitable in the next year or year after frankly.”

Despite that somewhat dour note, Uber Eats has had a busy third quarter so far. While the food delivery business lost its exclusive partnership with McDonald’s, it went national with Starbucks delivery, is experimenting with a dine-in feature, testing out an uber subscription service, launched a restaurant accelerator program in London, and partnered with OpenTable for delivery.

Now we’ll have to see if any of these moves deliver better results for the company.

How the Uber Eats ‘Dine-In’ Feature Could Affect Restaurant Operations

Uber Eats now wants to streamline more than just your food delivery order. The company made an addition this week when it announced it will also speed up your experience when you eat in the actual restaurant, too.

A tipster dropped a line to TechCrunch detailing the new Uber Eats Dine-In feature, which lets customers order their food ahead, so there’s very little wait from the time a person enters the restaurant to when they get their meal.

To use the feature, customers log into the Uber Eats app and choose the “dine-in” option. The app shows how long the food will take to prepare and notifies you when it’s nearly ready, which is your cue to head over to the restaurant and take a seat. Users can leave a tip for the server in the app. For this feature, Uber Eats also waives the usual delivery and service fees.

Image: Jenn Marston/The Spoon

The whole process is very much like Allset, a competitor that also offers a streamlined process for dining in-house.

Beyond how Uber Eats’ entrance into this area might affect Allset’s business, the move also raises questions about how an uptick in these sorts of apps could affect restaurant operations. Within Uber Eats’ Dine-In option, users are shown how long the food will take to prepare (see screenshots above). It’s unclear if that time calculation factors in how busy the kitchen is at the moment or, for that matter, if the restaurant has the seating to accommodate the order. The app seems like an ideal way for a person to speed up a lunch in the middle of the workday or a pre-movie dinner. But those are both times restaurants tend to get heavy traffic anyway, so it remains to be seen if adding another sales channel to the mix will make restaurants’ lives easier or more hectic.

One area Uber Dine-In could provide a boost is for off-peak times. As TC pointed out, restaurants could use the Dine-In feature to attract more customers during less busy times by running promotions through the app itself or by subsidizing an Uber ride to the restaurant. In theory, at least, these kinds of promotions could provide a small revenue boost for a restaurant.

Restaurant operations aside, apps like Dine-In and Allset do raise the question of why you would go out to eat in the first place if you don’t have the time or patience to wait 11 minutes for your food to arrive after ordering. There does seem to be something about these features that would make, say, a pre-movie meal feel more like just-another-transaction rather than an evening out with friends or family. That’s in the eye of the beholder, of course, and as we see more apps like these coming to market, we’ll hear plenty more pros and cons from both side of that argument.