Uber Eats is an online food ordering and delivery service launched by Uber in 2014. The platform facilitates food delivery through a network of couriers who use various transportation methods, including cars, scooters, bicycles, or walking. As of 2021, Uber Eats operates in more than 6,000 cities across 45 countries.

Food deliveries are performed by Uber drivers, who are responsible for transporting the orders to customers. In 2020, Uber Eats faced a lawsuit accusing the company of antitrust price manipulation. The lawsuit claimed that Uber required restaurants to charge the same prices for delivery as for dine-in services in order to be listed on the app, and imposed delivery fees ranging from 13% to 40% of the revenue.

History

Company type	Subsidiary
Industry	Online food ordering
Founded	August 26, 2014; 10 years ago
Founders	Travis Kalanick Garrett Camp
Headquarters	San Francisco, California, U.S.
Area served	45 countries, 6,000+ cities
Key people	Dara Khosrowshahi (CEO)
Services	Food delivery
Revenue	$8.30 billion (2021)
Parent	Uber
Website	ubereats.com

Uber Eats, a subsidiary of Uber, was launched in 2014. The company began offering food delivery services with the introduction of Uber FRESH in Santa Monica, California. In 2015, the platform was rebranded to Uber Eats, with the standalone ordering app debuting in Toronto. The service expanded to London and Paris in 2016.

In August 2018, Uber Eats modified its flat $4.99 delivery fee to a variable rate, based on distance, with a minimum of $2 and a maximum of $8. In the UK and Ireland, delivery fees were tied to the order’s value. In February 2019, the company reduced its commission fee from 35% to 30%. As part of its international expansion, Uber Eats planned to launch virtual restaurants in the UK, which are dedicated kitchens for delivery-only operations, often referred to as cloud kitchens.

By November 2018, Uber Eats was delivering in 200 cities across 20 countries in the EMEA region and planned to significantly increase its workforce in Europe. In 2019, the company announced plans to deliver food via drones and began offering a dine-in option in select cities.

In September 2019, Uber Eats exited the South Korean market due to intense competition. The company also introduced a pick-up option and expanded delivery operations for Burger King across the U.S.

In January 2020, Uber Eats sold its Indian operations to Zomato, acquiring a 10% stake in the latter. A few days later, McDonald's ended its exclusive delivery agreement with Uber Eats in the UK, shifting to Just Eat for its delivery services.

The COVID-19 pandemic saw Uber Eats' customer base grow by 30% in March 2020 as people opted for delivery services due to social distancing concerns. In May 2020, Uber Eats exited the United Arab Emirates, Saudi Arabia, and Egypt, transitioning operations to Careem, Uber’s Middle Eastern subsidiary. Later that year, Uber Eats acquired Post mates for $2.65 billion.

In December 2021, Uber Eats partnered with Japanese billionaire Yusaku Maezawa to complete its first food delivery to the International Space Station. In March 2022, the company added a fuel surcharge to deliveries in the U.S. and Canada, with rates varying based on delivery distance and gas prices.

In April 2022, Uber Eats partnered with Tesco in the UK to offer one-hour guaranteed delivery from 20 stores. In May 2022, the company initiated two autonomous delivery pilots in Los Angeles with Serve Robotics and Motional.

By December 2022, Uber Eats had partnered with Cartken to use self-driving six-wheeled robots for deliveries in Miami. These robots are set to deliver food and groceries, with the first service rollout yet to be disclosed.

In January 2024, Uber announced plans to shut down the alcohol delivery service Drizly by March 2024, consolidating the service under the Uber Eats platform.

Controversies

Allegations of Monopolistic Behavior

In April 2020, Uber Eats, alongside DoorDash, Grubhub, and Postmates, faced a lawsuit filed by a group of New York restaurant owners. The plaintiffs accused the companies of monopolistic practices, claiming they forced restaurants to sign contracts that required them to maintain identical pricing for dine-in and delivery orders if they wished to be listed on the apps. The lawsuit argued that this arrangement unfairly increased the cost for dine-in customers who were made to subsidize the delivery charges, which range from 13% to 40% of restaurant revenue, despite restaurants typically earning only 3% to 9% in profit. The plaintiffs sought triple damages for overcharges dating back to April 14, 2016. The case, filed in the U.S. District Court for the Southern District of New York, is titled Davitashvili v. GrubHub Inc., 20-cv-3000. While preliminary documents have been filed, a trial date has not been set.

Antitrust Lawsuit

In 2022, Uber Eats faced another antitrust lawsuit for allegedly manipulating prices by forcing restaurants to charge the same prices for delivery as for dine-in services. This lawsuit also challenged the company's practice of imposing high fees ranging from 13% to 40% of revenue on restaurant partners.

Courier Pay

On February 14, 2024, Uber Eats delivery drivers in the United Kingdom went on strike between 5pm and 10pm, organized by Delivery Job UK. The protest aimed to demand a minimum payment of £5 per order for couriers. This strike is noted as the largest to impact the platform in the UK.

AI Bias

In March 2024, Uber Eats was involved in a controversy related to its AI-powered facial recognition system. The company settled a case with a black Uber Eats courier who had his access to the app denied and later had his account deleted due to an issue with the AI’s facial recognition system. This technology, used since April 2020 for identity verification, mistakenly flagged the courier's selfie as a mismatch. The courier received an undisclosed payout from the company.

Finances

References