Uber Eats took another competitive hit this week when it lost its exclusive rights to deliver McDonald’s orders in the UK. Rival delivery service Just Eat announced on Tuesday it had struck a deal to become the QSR chain’s second delivery partner in Britain, according to a report from CNN Business.
Joseph Barnet-Lamb, an analyst at Credit Suisse, told CNN that orders from McDonald’s account for about half of the 30 million deliveries Uber Eats does in the UK each year. “This is all part of Just Eat taking back control of the competitive landscape,” he said.
Just Eat is already a leader in the UK food delivery space, and its planned merger with another European food delivery heavyweight, Takeaway.com, could give the company even more competitive muscle that players like Uber Eats and Deliveroo will have to fight. (British antitrust watchdog the CMA certainly thinks so, as the deal with Takeaway.com is currently under investigation, though it’s still expected to go through.)
This is the second time Uber Eats has lost an exclusivity contract with the Golden Arches. In July 2019, McDonald’s added DoorDash as a second delivery partner in the U.S., then later added Grubhub, too.
None of this is particularly surprising. Uber is under pressure from investors to prove it can be more than just a cash-burning business — in other words, profitable. Part of that process includes shutting services down in markets where they don’t perform well or fall behind the local competition.
That doesn’t mean Eats is leaving the UK anytime soon. However, Just Eats processed over 123 million orders in the UK in 2018. If its deal with Takeaway.com goes through, it will create one of the largest food delivery services in the world, and a competitive threat that goes far beyond the question of who’s delivering Big Macs.