If you are an Uber Eats driver, lookout because some huge news just broke and you may want to consider picking up DoorDash. Why? Well, Uber Eats was dealt a crippling blow earlier today when news broke that McDonald’s would not renew its exclusive deal with the delivery service. Since 2017, Uber Eats has had exclusive rights to the gigantic restaurant and many drivers I am sure to have enjoyed the fruits of this deal. But, now you may have to consider ditching Uber Eats.
Is Uber Eats in trouble?
Most likely, but we will have to see. The reason being that while McDonald’s was a healthy chunk of their business, Uber Eats is still one of the larger players in the game. However, with that being said this does give DoorDash an opening to continue to climb. As of now Uber Eats only controls about 19% of the delivery market. Whereas DoorDash and Grubhub control 32% and 31% respectively. This could mean that Uber Eats could see a rapid decline if they don’t find a new exclusive contract. DoorDash already has an exclusive deal with another fast-food giant in Wendy’s, if they continue to grow as expected, Uber Eats could be in serious trouble.
What does this mean for DoorDash?
It is great news if you are a DoorDasher! Uber had maintained a stranglehold on one of the most popular restaurants in the delivery business. Anyone who has ever driven for Uber Eats knows how much of a percentage McDonald’s was. McDonald’s will also be joining DoorDash’s subscription model, called DashPass, which offers free deliveries to customers who spend more than $12. This is a huge win for the customer who often had to pay nearly double for a McDonald’s order on Uber Eats.
Does this mean that Uber Eats won’t do McDonald’s Delivery Anymore?
No, many restaurants will likely retain both services to maximize their options. Customer preference for Uber Eats or DoorDash is too valuable to the restaurants to play favorites. Many franchises may retain both simply because of the sheer volume. However, if Uber Eats continues to overcharge for McDonald’s Uber Eats orders, expect that many customers will make the switch to DoorDash.
Uber Eats is working on their own subscription service
It’s called Eats Pass, and it will function in a similar fashion to the DashPass. For a fee of $10 a month Uber Eats customers will be able to minimize their delivery fees. But even if they manage to get this program off the ground they will have to deal with bad blood. Many franchises are understandably tired of Uber taking a near 20% cut of the entire order. So unless Uber Eats finds a way to lower its price and share some of the profit, they could see Door Dash run away with the entire market.
What does this mean for GrubHub?
Well, it’s not looking for Uber Eats or for GrubHub. This move gives DoorDash a clear advantage against both of its main competitors. Grubhub is still hanging onto their exclusive rights with Yum! Brands, that includes restaurants like Taco Bell and KFC. They landed this deal through an investment deal brokered to leverage free deliveries. This model could prove extremely useful if Grubhub can get a similar deal with McDonald’s or other fast-food giants in the future.
Why this might be really bad news for Uber?
Uber Eats was one of the primary reasons that investors have any faith in the rideshare giant. As the company continues to leak profits and lose money hand over fist, Uber Eats was one of only two main branches turning a profit. With the loss of this McDonald’s contract, Uber Eats could be on its way out. It is clear that DoorDash is seen by many investors are the clear victor in the delivery space. Market dominance has been in their back pocket for some time and this deal only assures their supremacy.
Are you an Uber Eats Driver? We want to hear from you!
We want to know how much this move is affecting you. Are you noticing a downtick in McDonald’s orders? Are you noticing a lack of demand now? Reach out and let us know!