Uber Eats but Not for Delivery

The third-party delivery app goes in-restaurant and its VP talks how it'll eventually make money.

Uber Eats is extending its app for use inside the restaurant. After testing in eight U.S. markets and a few others overseas, the company is expanding the program, capitalizing on a touchless, tech-fueled restaurant future. 

Restaurant customers can scan a QR code (QR codes! Woo!) to select “pickup” or “dine in,” or just find the restaurant in the Uber Eats app to place an order, enter a table number, and pay. 

It’s another entry into the newly hot and expanded world of digital ordering and payment for restaurant businesses. Existing restaurant tech providers worked quickly to offer this capability as restaurant and consumer sentiment around “high-touch” switched to safety concerns for employees and customers. It was (anecdotally at least) not hard to do for companies that had already built robust digital ordering and payment capability for delivery. In fact, what might be harder is for a restaurant business to understand which of its 10 options for digital ordering and payment to implement right now. 

My very casual and unofficial sweep of sentiment posted to LinkedIn by operators and other restaurant technologists finds that the big concerns are the same as always. They’re about data, money, and third party services getting bigger during a time of crisis and need for independent restaurants. Still, for restaurants on the Uber Eats platform, it could be an easy shortcut or temporary solution that helps them operate right now. (Uber says it will not charge restaurants marketplace fees for using the in-restaurant and pickup features through the end of the year.) 

This feature release is a small glimpse into the future of Uber Eats, a bright spot on its parent company’s pandemic balance sheet. CEO Dara Khosrowshahi has already said Uber’s delivery faction will work to increase its take rate (that’s the amount of money the company receives, all told, after completing the transaction) to 15 percent per order over the next year. 

At the Deutsche Bank 2020 Virtual Technology Conference on Tuesday, Pierre Dimitri Gore-Coty, Uber’s VP of delivery, provided another look into Uber’s crystal ball. He summed up its trajectory so far as a growth-at-all-costs mindset, but says it will now transition into long term strategic and sustainable growth. (Translation: we’re now big enough to be thoughtful and cost-effective about what we’re doing.) He also reiterated Khosrowshahi’s longstanding plan to only operate in markets as the number-one or -two player. 

Uber plans to do all of this while leveraging the Covid tailwinds it’s experienced since March. In the second quarter, new eaters (Uber’s metric for Eats customers) rose over 50 percent. “And I don’t see any reason why we would not keep the benefit of those users,” Gore-Coty said. “We see no difference in terms of how they engage with the apps relative to the people we had before.” Same goes for restaurants who are new to the platform, or new to third-party delivery. “We have no reason to believe that they will suddenly disappear from the category as the dining rooms start to reopen again.” 

But in order to make more money, Uber needs its restaurant delivery customers to order more food. Gore-Coty said his team is working to increase average basket sizes; that is, the number of items in one order. (This metric has been up across third-party delivery services, broadly, during the pandemic.) Uber also needs to reduce its own costs — delivery costs, mostly. The company is, of course, betting on tech to do that, improving “order batching” — or, pairing the right couriers with the right orders so one human can deliver multiple orders quickly. (Gore-Coty says that Postmates, which Uber is acquiring, has done especially well on this front.) Understanding what they’re delivering matters, too. Keeping hot food hot and cold food cold is more challenging than delivering a bag of potato chips, and the technology needs to know the difference.

It doesn’t sound like any of this will come at a cost to restaurants that use Uber Eats, at least not right away. “I don't think that we need to charge higher fees from restaurants or higher fees from end users to be able to deliver on the take rate improvements that I've alluded to,” he said. 

But restaurants might need to pay up eventually, especially to be included in new programs. Customers already pay for Eats Pass, Uber’s new subscription service, which Gore-Coty says increases both the number of orders and basket size from any given subscriber. “And then you obviously collect the subscription fee on top of eventually having the opportunity if you'd like to, to charge restaurants for being part of that membership offering,” he said. 

Yelp Data Says More Bars and Restaurants Have Closed. But Also...

Yelp just released its latest economic impact report, a monthly look at business performance as judged by their Yelp listings. The restaurant industry on Yelp has seen a total of 32,109 closures as of August 31, with 19,590 (that’s 61 percent) of these business closures indicated to be permanent. 

In Yelp’s hometown of San Francisco, Eater’s Eve Batey has a ...sobering look at what it looks like when Yelp reviewers blame restaurants for something that’s out of their control. In this case: enforcing a citywide mask mandate. One review cited in the article laments how stressful it was to come to a restaurant and drink beer. “The server refused to come within 10 feet of our table without everyone wearing masks,” the Yelper wrote. Hey, good for you, anonymous server, who is following the rules outlined by the city and working to keep themselves safe and healthy so they can continue serving beer to complainers like this reviewer. 

A Yelp spokesperson told Eater that reviews like this aren’t the norm, and that positive reviews in support of restaurants during Covid have actually gone up. That’s great, but providing a platform that allows someone to ding a restaurant for policy enforcement still seems pretty bad. Would Yelp allow a one-star review posted after a bartender took a drunk person’s keys away to prevent them from driving home? (I should probably ask the company’s stance on that, actually.) 

UPDATE 9/16, 2:30PT:

A Yelp company spokesperson says that Yelp has adjusted its reviews policy during Covid to disallow reviews penalizing a business for enforcing safety regulations and policies. Yelp’s statement below:

In March, we implemented special review Content Guidelines to protect local businesses from reputational harm related to these extraordinary circumstances. For example, we have a zero tolerance for any claims in reviews of contracting COVID-19 from a business or its employees, or negative reviews about a business being closed during what would be their regular open hours in normal circumstances. In the last few months we’ve also updated our Content Guidelines and do not allow reviews where a user is critical of the safety measures a business is taking, such as requiring masks, modified hours due to the pandemic or other events that are out of a business’s control, such as government regulations.

Reviews flagged by the community will be evaluated by our content moderation team to ensure they comply with our Content Guidelines, including reflecting a first-hand experience. Content that violates our guidelines will be removed and will not count toward a business’s star rating. 

We saw the lowest removal months when most of the country was shut down during April and May. Since May, we’ve seen a month-over-month increase in the removal of pandemic-related content as more businesses and states are opening back up.

Tock’s New Look 

Reservations/ticketing/takeout/prepayment facilitator Tock introduced a new homepage this week. The new look is geared toward pandemic-era dining, highlighting options for pickup and delivery, dine-in, events, and more. Tock co-founder and CEO Nick Kokonas said that over 3,500 new restaurants have signed up for the platform in the past few months. 


I live in the deep blue state of California where we’re largely spared the targeted political ads for candidates in a contentious national election. But what we don’t get in Trumpisms we make up for in digital ads, emails, and in-app notifications from third party delivery companies in support of Proposition 22 — the California state ballot measure backed by Uber, DoorDash, and others that would exempt rideshare drivers specifically from being classified as employees, which they are supposed to do under AB5, a state law that went into effect on January 1. Instead, these companies have continued to fight the legislation, committing millions of dollars to the cause. 

Maybe it’s because I write about this stuff. Maybe it’s because some nights I’m just hungry and trying to feed my family. But does anyone else feel like it’s been… a lot? 

Expedite is produced by Kristen Hawley, a San Francisco-based journalist with over six years of experience covering the restaurant technology industry. Previous iterations of this content were available via Chefs+Tech and Skift Table. Thanks for reading!