The emergence of the food-delivery platform Uber Eats in 2015 was a revolution in the history of the internet, fostering great industrial and social change. Focusing on how the platform has transformed the way we eat and how businesses in the food industry run, this essay will profile and critically analyze the role of Uber Eats as an agent of internetworked change.
The first section of this essay provides a general discussion of the Uber Eats company. Section two discusses the company’s history, starting with how it was born, and its growth into the success it is today. Section three and four will explore Uber Eats’ business model and ecosystem respectively, while the final section examines the ways in which the company has transformed our use and understanding of internet platforms.
What is Uber Eats?
Uber Eats is an online food ordering and delivery platform created as an extension of the ride sharing app Uber. The platform is accessible through a stand-alone smartphone app or website, allowing customers to order food from a plethora of participating restaurants, which is then delivered to them by a delivery partner for a small fee (Henama & Sifolo, 2017). Like Uber, Uber Eats uses a cashless, automated payment system in which the customer’s on-file credit card is charged for the order. They also share the same tracking and GPS function which allows users to follow their order in the app – from the moment the order is received by the restaurant to the moment the delivery partner arrives at their door.
How Uber Eats Works. Video: via Youtube.
The Origins of Uber Eats
Uber Eats’ story began in Paris in 2008 with the birth of its parent company Uber. According to company lore, the idea for Uber was born on a cold winter evening in Pairs in 2008, when two friends Travis Kalanick and Garrett Camp were unable to get a cab. Upon returning home to the United States, the pair set out to develop a smartphone app that would allow people to “tap a button and get a ride” (Uber, 2019). The app was launched in San Francisco in 2009, and the first Uber trip was made in 2010. Since then, the company has enjoyed fantastic growth, and has expanded to include food delivery through Uber Eats.
Originally launched in Santa Monica in 2014 as Uber Fresh, Uber Eats was only accessible from within Uber’s flagship app, as a toggle on the far right-hand side of the slider. The feature allowed users to order lunch from 11:30 AM to 2:30 PM, from a prix fixe menu that offered a different selection of food each day and was refreshed every week (Etherington, 2014). Realizing that requesting a ride and ordering food are two entirely different experiences, Uber launched a stand-alone version of its Uber Fresh feature in 2015, which it renamed to Uber Eats.
In the four years since the company started operating in the US, it has achieved extremely rapid global expansion. Uber Eats is currently available in more than 250 cities across North America, South America, Europe, Asia, Africa, and Australia (Uber Eats, 2019). Last year, the company delivered an estimated $6 billion worth of food worldwide, and this figure is on track to grow to $10 billion by the end of 2019, according to CEO Dara Khosrowshahi (Carson, 2019).
Uber Eats’ Business Model in a Nutshell
As noted by Teece (2018), the term business model refers to the system of interdependent activities in a firm that allow it to create and deliver value to customers, and also to capture a share of that value. Uber Eats’ business model is a three-sided marketplace, connecting customers with restaurant and delivery partners. Restaurants partner with Uber Eats to have their brand and menu listed on the platform; customers order food from their menus using the Uber Eats app; and delivery partners pick up the food from the restaurants and drop it off at the customer’s door (Austin, n.d.).
Uber Eats provides value to its customers by enabling them to order any amount of food (no minimum order concept) from a large variety of restaurants in two unique ways; these being, real-time ordering and scheduled ordering. With real-time ordering, orders are processed automatically as soon as they are received by the restaurant and are delivered to the customer within 30 minutes of the order being placed. The scheduled ordering feature, on the other hand, gives customers the ability to pre-schedule an order for the future (Kataria, 2019).
A large part of Uber Eats’ business model success stems from the fact that it does not just provide value propositions to its customers, but also to its partners and other actors in its ecosystem. The restaurants that partner with Uber Eats get a virtual 24-7 presence on the app which increases their exposure to customers. Additionally, restaurant partners who choose to pay a marketing fee are offed customer-facing brand campaigns, relatable social media posts and email marketing to Uber’s rider base (Austin, n.d.). Uber Eats also offers more job opportunities for existing Uber drivers. For example, an Uber driver who has just dropped a customer off at their house can handle a food delivery service right afterwards.
The Uber Eats Ecosystem
According to Looi (2000, p.56), an internet ecology refers to a complex “collection of people and machines that perform activities in a distributed way”. Uber Eats is a prime example of an internet ecology, in which competitors, users, partners, regulators, owners and service providers interact and support each other in carrying out their operations.
Uber Eats faces competition from both direct and indirect competitors. A competitive analysis of the food delivery business in which Uber Eats operates identifies Foodora, Deliveroo and Menulog as direct competitors. These companies provide an identical service to Uber Eats whereby users can browse local restaurants, place an order and track it as it is prepared and delivered to them by a delivery partner (Marketing4Restaurants, 2019). Indirect competitors include fast food companies such as McDonalds and KFC, and meal delivery subscription services such as Youfoodz and Lite n Easy. While these companies differ in terms of strategy and positioning, they compete indirectly with Uber Eats because they satisfy the same consumer need.
Unsurprisingly, millennials are the biggest users of Uber Eats. Users in this age group are increasingly identifying as time-starved, food-obssessed and technology-savvy (Roy Morgan, 2018). As a result, they are turning to technology to maximize their leisure time and have food delivered to them that is tailored to their unique tastes and preferences. Uber Eats use is also strongly concentrated among city dwellers.
In an internet ecology, the actors whose presence are more critical to the functioning of the system than others are called ‘keystone species’ (Nardi, 1998). Uber Eats’ keystone species are its restaurant and delivery partners. As previously explained, these partners work together with Uber Eats to create the uniquely complex and efficient three-sided marketplace that brings food to customers all around the world.
Uber Eats’ ecosystem is summarized in the diagram below.
Transformations Brought About by Uber Eats
There is no doubt that Uber Eats has had a transformative effect on the restaurant industry. Most notably, the success of Uber Eats has given rise to two entirely new culinary concepts: the ‘virtual restaurant’ and the ‘dark kitchen’. According to a New York Times article by Issac and Yafee-Bellany, the former refers to a separate brand for a real-life restaurant that works out of the same kitchen but makes different cuisines specifically for food delivery services, while the latter refers to a separate space that has no tables or wait staff as it only prepares food for food delivery services. With the popularity of Uber Eats booming, a trend which is expected to continue to grow as consumer preferences shift towards convenience foods, virtual restaurants and dark kitchens are on the rise.
Uber Eats has also revolutionized the food ordering and delivery experience. Prior to Uber Eats, the experience of ordering food was a hassle. However, with just a few taps on the screen, we now have fast and easy access to a wide range of restaurants through Uber Eats. As payments are charged to the customer’s on-file credit card, they no longer have to worry about having enough cash in their wallet. Additionally, orders made through Uber Eats are sent directly to the customer’s stated delivery address, meaning that they do not have to endure painful conversations trying to explain where they live or navigate language barriers with restaurant staff and delivery drivers.
Further, Uber Eats has created thousands of jobs for workers in the gig economy. As noted by Sanders and Pattison (2016), the gig economy refers to the growing number of workers abandoning traditional 9 to 5 employment in favor of working for a gig, or usually limited time job. This shift towards the gig economy is driven by the fact that it allows more freedom, flexibility and autonomy in the workplace (Chau, 2019). Unfortunately, many workers in the gig economy have fallen victim to global tech companies like Uber Eats who misclassify their workers as independent contractors as opposed to employees. This is exemplified in the recent Australian case in which Uber Eats driver Amita Gupta was sacked for showing up 10 minutes late. Uber Eats had classified Amita as an independent contractor, denying her the right to superannuation, paid sick leave and annual leave. Hence, with more people turning to the flexibility of jobs that the gig economy offers, new regulations must be implemented to stop the exploitation of workers.
While it is clear that Uber Eats creates jobs for delivery drivers, it can also be argued that it reduces job opportunities for restaurant staff, namely wait and bar staff. With virtual restaurants and dark kitchens on the rise, there will come a time when restaurant staff are no longer needed.
As has been shown, Uber Eats is a revolutionary platform. Despite being a latecomer to the food delivery market, Uber Eats’ uniquely complex three-sided business model and ecosystem has enabled it to emerge as a key player. Not only has it transformed the way in which restaurants operate, but it has also changed the way we eat and think about food.
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Chau, D. (2019). Sacked Uber Eats worker’s Fair Work Commission appeal could change the gig economy. ABC. Retrieved from https://www.abc.net.au/news/2019-09-16/uber-eats-fwc-appeal-unfair-dismissal/11516808
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