The food delivery market is worth over $100 billion.
But, before you go into business with Uber, it’s worth questioning whether the platform is actually a good deal for restaurant owners. After all, if you don’t do your due diligence you might find yourself making a loss.
If you want a share of that, Uber Eats is willing to help you get your slice of the pie.
This post will explore how Uber Eats works, and whether this service can help your restaurant.
By the time you’re finished reading, you’ll be able to make an informed decision on whether Uber Eats is the right option for you.
What is Uber Eats?
Uber Eats is an app that lets people order food deliveryand then have it delivered to wherever they are.
This food can come from a typical takeout location, such as a pizza place, but it could also come from a restaurant that wouldn’t normally offer delivery.
One of the cool things about Uber Eats is the app makes use of the existing infrastructure people use when ordering a ‘ride’ with Uber.
This means you can see the vehicle that’s going to deliver your food, and how long it’ll take to arrive.
Uber wants to broaden the selection on offer when it comes to ordering food for delivery, and has worked hard to attract some of the big boys of the restaurant space.
With Uber Eats, you can now order food from McDonald’s, Nandos, and Wagamama to be delivered straight to your door.
Why Restaurants Use Uber Eats
For restaurants, Uber Eats hopes to do a number of things.
For one, it wants to help restaurants establish a delivery service if they don’t already have one.
Below is a good description of how Uber Eats helps restaurants establish a delivery service.
For those that already provide deliveries, Uber wants to offer them an alternative way to get the job done.
By using Uber Eats, restaurant owners can also benefit from the Uber brand through association.
Uber is good – so Uber Eats must be good too, right?
Plus, it’s worth noting that Uber is spending marketing dollars on promoting Uber Eats. If your restaurant is on Uber Eats, it can be on the receiving end of this marketing spend.
So, it all sounds good so far, and with so many benefits on offer why wouldn’t you want to use the platform?
Well…Let’s explore why the promise of Uber Eats might not be as hopeful as it seems.
What’s Wrong With Using Uber Eats?
The big issue a lot of restaurants have with Uber Eats is the commission.
For the most part, Uber Eats takes an estimated 30% commission. Though, in some cases, that figure can be as high as 35%.
If your margins are lower than 30%, using a service like Uber Eats can leave you out of pocket.
Of course, if your profit margin can cover the commission, 30% of a sale is still a large amount of money to give away.
So, Uber Eats might help you boost revenue numbers, but you might not experience a large increase in profits by using the platform.
Using Uber Eats can also hurt your profits for no good reason.
According to one study, 43% of people used the Uber Eats app to order a mealthey would have otherwise had at a restaurant.
Thus, if you’re selling food to this 43%, consider how much more your restaurant would have benefited if these people had to visit your restaurant to eat.
Aside from the fact you don’t have to pay commission, you’d have also benefited from the sales of drinks and any upsells your wait staff could persuade the diner to go for.
When you total this up, that’s a lot more profit for your restaurant.
Should You Use Uber Eats?
Aside from the problems associated with commission, there’s no clear cut answer as to whether Uber Eats is a good platform for your restaurant.
In one article, a restaurant owner claims Uber Eats has ‘definitely been worth it.’
But, some companies, like McDonald’s are beginning to lose faith in their ability to use UberEats, and maintain adequate margins. If a company as large as Mcdonald’s is having doubts, it calls into question how useful the platform is for small businesses.
You need to do the math for your own restaurant and figure out if you can handle the margins.
You might want to use Uber Eats because it provides you with a delivery service.
But if this is the case, you need to think about what the cost would be if you set up your own delivery service. You then need to compare this with the costs you might expect if you used Uber Eats.
If you only want to use Uber Eats because you’re worried about missing out – that’s a fair concern.
Fortunately, if your margins allow, there is a way to benefit from Uber Eats, without feeling as though you’re on the losing end of the deal.
Here are some of the things you can do…
Use Uber Eats to Generate Awareness
One of the great things about Uber Eats is that it provides you with an incredible way to market your business. If your restaurant is on the platform, you’re able to get it in front of a lot of people, pretty quickly.
So, you might want to look at Uber Eats as a means of generating awareness for your restaurant, but not as a means of making significant short term profit.
This is a stance adopted by a well-known restaurant in New Zealand that managed to experience a ‘10% lift in trade,’ as a result of using Uber Eats.
Use Uber Eats to Generate Leads
Another option is to use Uber Eats to build up a database of customers.
Taking this step allows you to have greater control over your customer data, and therefore the future of your business.
That’s because if you have your own list, you can reach these people long after they’ve placed an order with you on Uber Eats.
By adopting this approach, Uber becomes a way to generate a list of customers you can market to over the long-term, rather than a way to make a quick buck.
You can build an email list by including a leaflet in the ‘delivery bag.’ This leaflet should explain how people can join your list and the benefits of doing so.
It’s relatively easy to create something like this with the help of a platform like Canva.
When people are on your email list, you can market to them and encourage them to place orders.
Or, you could provide people with printed vouchers they can use right away.
You might experience greater success doing things this way, because you remove the extra step of having to join an email list.
Is There an Alternative to Uber Eats?
It’s hard to argue with the convenience factor that Uber Eats can provide. But if you can’t handle the commission then the platform is a no go.
That said, there is a middle ground here, and it comes in the form of jumper.
Well, you can use jumper to process orders via apps like Facebook Messenger.
People can start a ‘conversation’ with your restaurant, and then they can go through an ordering process, as shown below.
Once you’ve made the food, and you’ve handed it over to a driver, you can let the customer know that their food is on the way.
By allowing customers to order food this way, they can achieve some of the convenience that comes with Uber Eats. They don’t have to pick up the phone and they don’t necessarily have pay with cash.
Meanwhile, you benefit because you don’t have to pay the 30% commission since jumper only charges 1.5%.
Make People Aware of This Alternative through Facebook Ads
Of course, allowing people to order items from you using a platform like Jumper will count for very little, if people don’t know it’s something they can actually do.
Because of this, you should use something like Facebook ads (FB Ads) to push products that can people can order in this way.
FB Ads is a good way to do this, because they make it easy for you to get in front of your target audience.
For instance, if your restaurant is in San Francisco, you can use FB Ads to target people that live only in that area.
You can even target people that have an interest in the kind of food your restaurant sells.
When it comes to promoting an ad that allows people to order food via Jumper, you might create something like the one below.
As you can see, there’s a QR code in this ad, and people can use the
To increase the odds of people taking action, you might include a special offer in the ad, such as the ‘Buy 1 get 1 Free’ deal that’s mentioned above.
You may also want to provide a short explanation in the ad description that tells people how they can use this QR code to benefit from the offer.
If people take you up on these offers and become a customer, you should add them to an email list. You can then use this email list to push offers and to keep people interested in the idea of visiting or ordering takeout from your restaurant.
You might also want to remind these people that they can leave a review for you on platforms like Google.
Taking this step can help you generate more ‘organic’ interest in your restaurant.
The reviews will improve your Google rankings, thereby increasing the odds that people will find you when searching for a local restaurant. Just make sure you don’t incentivize people to leave a review by offering them a discount or something for free.
There are Alternatives is Uber Eats is too Expensive
Plenty of companies are trying to disrupt the food business, and so far, it looks as though they’re experiencing varying levels of success.
It’s hard to say whether Uber Eats will work for your restaurant, as it’ll come down to what your numbers are. If your margins allow, it might be worth trying out the platform to see what kind of results it can deliver for you.
If the commissions are too high, you might want to try alternative options like Jumper.
In doing so, you can achieve the streamlined experience users want, while also maintaining healthy margins.
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