PREMIUM FREE TRIAL

Uber turns up the heat on its food delivery service

JOHANNESBURG — Having been a loyal customer of Uber Eats, I can definitely say that it’s changed many people’s take away habits. It’s now common on Friday night to hear food delivery bikes buzzing around suburbs in cities like Johannesburg delivering somebody, somewhere their latest order. South Africa’s biggest company by market value, Naspers, is also a major player in the food delivery space with global plays in businesses like Delivery Hero. With Uber ramping up its Eats offering, this space is about to get a lot hotter. – Gareth van Zyl

By Giles Turner

(Bloomberg) – Uber Technologies Inc. said it’ll triple headcount working on food delivery across Europe, the Middle East and Africa in its fight for market share against local rivals including Deliveroo and Just Eat Plc.

The restaurant delivery arm of the world’s largest ride-hailing company, called Uber Eats, represents more than 10 percent of gross bookings across the business. Uber is also expanding how users can pay for food and looking to generate more business via its website rather than its app, said Rodrigo Arévalo, head of Uber Eats in the EMEA region.

Picture published courtesy of Twitter

Uber Eats is set to increase staff in EMEA to 900 from 300 next year, Arévalo said. Drivers are ferrying restaurant orders in more than 200 cities in 20 countries across the region, after debuting in London in 2016.

The company is now looking at ways of attracting more users to its website, in a bid to take customers from rival Just Eat. The vast majority of Uber Eat’s orders in EMEA – about 84 percent – come via its app. At Just Eat, the number of users ordering food via mobile is closer to half, according to company filings.

Uber Eats’ expansion is not without issues. In late October, a London court weighed whether Uber’s drivers are really self-employed, as the company says. If the company is forced to treat drivers as workers eligible for minimum wage and vacation pay, businesses with similar models – such as Uber Eats and Deliveroo – may have to do the same.

Negotiating the myriad of payment options throughout the region has also been a challenge. “In Egypt, 94 percent of financial transactions are done in cash,” said Arévalo. “In the Netherlands, 90 percent of electronic payments are made with iDEAL.”

Uber Eats is rolling out local payment methods for various regions. In August, it incorporated Dutch e-commerce payment service iDEAL within its app, and in France, users can pay with prepaid meal vouchers. This year, it also allowed cash payments in Saudi Arabia, Egypt and South Africa.

Uber Eats and Deliveroo are also battling for so-called virtual restaurants, where eateries lease kitchen space to prepare food for couriers. With no dining rooms or wait staff, these outfits pop up where food delivery companies expect demand, and sell their meals through Uber Eats or Deliveroo’s app. Deliveroo has more than 400 virtual restaurants operating on its platform in the U.K. Uber Eats hopes to have a similar number in the country by the end of the year, said Arévalo.

Uber Eats remains open to bolt-on deals. In May, it acquired Ordertalk, a Dallas-based company focused on online ordering software. Uber was in early talks to buy food-delivery company Deliveroo, Bloomberg reported in September.

“Is something going to happen with Deliveroo and Uber? Who knows,” Uber Chief Executive Officer Dara Khosrowshahi said last month. “But at this point, the focus is on organic expansion. I don’t want to comment on specifically who, but we are constantly talking to any and every player out there.”

Make Better Decisions. Start your Biznews Premium FREE TRIAL today.