Uber Technologies Inc. has developed a full-scale meal delivery service and it is preparing to roll it out in about 10 cities in the US. This is an expansion that will test the ability of the company to use its drivers for moving goods. In the next few weeks, customers in cities such as Chicago, Los Angeles, Austin, Texas and New York will be able to take advantage of a new and dedicated UberEats app for ordering food from complete menus of a variety of restaurants and getting their food delivered by an Uber driver. It is the aim of the ride-hailing service to find a new revenue stream in the food delivery industry.
This is a highly speculative and competitive business where a number of startups such as DoorDash Inc. and Postmates Inc. are already vying for customer attention. Some of these companies have found it difficult to prove they can operate profitably, which has made it tough for them to raise new funding at high valuations and has brought about a slowdown in hiring. Sidecar Technologies Inc., one of Uber’s early competitors in the ride-hailing market, had experimented with delivering packages and food in the previous year, but had shut down last month and sold its assets to General Motors Co.
Sunil Paul, the chief executive and co-founder of Sidecar, said in a blogpost on Wednesday that they had managed to beat Uber on the innovations front, but had not been successful in winning the market as Uber has a great deal of capital at its disposal and is willing to go to great lengths to achieve victory. Uber had begun offering the UberEats delivery service in a few cities in the previous year, which was basically an expansion of the lunch-time only service. Now, the company will take advantage of its network of a million drivers for transporting goods as well as people.
There have been mixed results in recent years when Uber tried its hand at handling local logistics by transporting everything from toothpaste in Washington DC to designer suits in New York. As far as the UberEats app is concerned, it is the company’s first attempt to develop a mobile app from scratch since it rolled out its ride-hailing app five years ago. This new app will be available in mobile app stores of Alphabet Inc.’s Google and Apple Inc. by the end of March. It has been available in Toronto for over a month.
Uber has been testing an expanded meal delivery service in Toronto with partnerships with about 100 local restaurants. The service allows customers to order any item from a full menu at any time between 10 a.m. and 10 p.m. and get it delivered by an Uber driver within 30 to 40 minutes. UberEats will be working in the same way in coming weeks and will be offered in 10 US cities where the lunchtime service is already offered. These also include San Francisco, Washington D.C., Seattle, Houston, Atlanta and Dallas.