Uber Eats has faced a great deal of pressure as of late. With the recent merger of Takeaway.com and Just Eat, it doesn’t seem to be ending anytime soon. However, does that mean that Uber Technologies, Inc needs to be worried? The answer, in short, is not really. In all actuality, there are probably more clear and present dangers lurking.
Taking a look at Takeaway.com and Just Eat
To see why Uber isn’t worried, one only has to look at the numbers coming from Takeaway.com and Just Eat. The combined numbers being reported by both of the merging firms come in at around 355 million orders in 2018. They also brought in roughly $8 billion in revenue. That is a huge chunk of the market!
So why isn’t Uber concerned?
To contrast, Uber Eats, delivered over 439 million orders in 2018 and brought in roughly $8 billion in revenue. At first glance, you can see that the merger of Takeaway.com and Just Eat brings them in line with size and revenue. However, when you take a peek at their current growth, they are heavily outpacing the competition. The company grew by approximately 150% in 2018 and has posted an 89% growth in the first quarter of 2019. To contrast, Takeaway.com was boosted by their recent acquisition of Delivery Hero to around 70% growth and Just Eat posted growth of approximately 20%. Even when you factor in driver incentives and additional subsidies, Uber Eats is clearly outpacing the competition.
Uber Eats is also sitting on a massive pile of cash
This means that even though in size, the firms are seemingly evenly matched, Uber can potentially outspend the competition. With both Takeaway.com and Just Eats both posting losses in 2018, their position to compete with Uber Technologies, Inc is unrealistic. Uber is currently sitting on a $5.7 Billion cash heap, even though Uber Eats posted a loss as well.
What is the key advantage?
Uber Eats’ key advantage is their age in the market. They are currently partnered with over 222,000 restaurants in 50 cities in over 63 countries.
In contrast, the merging companies of Takeaway.com and Just Eat are packing only 155,000 restaurants in their wheelhouse in only 23 countries. This means that Uber Eats has a huge advantage in scale, to begin with. When you factor their scale into their growth and their extensive pile of cash, Uber doesn’t appear to be shaking in its boots just yet.
What about Deliveroo?
The real threat that Uber is probably focusing on is the Amazon and Deliveroo relationship. Deliveroo recently received a massive boon of $1.5 billion in investors like Amazon. This boost of cash along with the relative size of Deliveroo which aligns with Takeaway.com and Just Eat, makes them a serious threat. Also, Amazon will potentially provide logistical support and delivery expertise to Deliveroo. With that said, Uber could indeed have some stiff competition on the rise.
The Market is crowded…but…
For Uber Eats, the primary target is to try and catch up to Door Dash, especially since they’ve lost their exclusive partnership with McDonald’s to them. Their second priority will be to box out their rival Grubhub. The new up and coming delivery services still have a great deal of work to do. They are behind the eight ball. Before they can begin to take market share from the big three of Door Dash, Uber Eats, and Grubhub. Look for Uber Eats to continue to grow, particularly with the exclusive relationship with Starbucks Coffee Company. Coffee makes the world go, and they want to deliver that coffee.