Staying in control as food delivery services take off

As Uber prepares to launch a food delivery service in Melbourne, its important to understand the changing face of food delivery and how to maintain control of your product.

Not content with aggravating licensed taxi drivers or delivering puppies in Australia, global phenomena Uber are launching their new food delivery service UberEATS later this month, picking Melbourne as their third city outside the US to receive the service.

Melbourne will soon join Paris and Toronto as the only non-American cities to be rigged up with the UberEATS service, with Melbourne selected over Sydney as it is, in the words of UberEATS spearheader Simon Rossi, “known probably throughout the world as the foodie capital of Australia”.

When the service is launched in the coming weeks, diners will be able to download the new app and order food from a whole range of restaurants for delivery – for a fee – to their location of choice. The service will operate initially in the CBD and inner suburbs, with plans to expand wider and then into Sydney in due course.

UberEATS arrives into a market already bristling with blossoming food delivery services – the global Deliveroo launched in Australia just last year while local startup SupperTime having been recently acquired by international brand Delivery Hero.

The rise reflects the changing habits of customers as well as the improving reputation of food delivery services, with the image of an unhealthy take aways reduced as the options available for delivery increase.

The challenge for restaurateurs is to decide whether to jump on one or all of these platforms, or stay clear. While an external food delivery service can help a restaurant increase their reach and customer base, food for delivery is an added complication for businesses operating on tight margins. More alarmingly, as the food delivery platforms become more popular, some are starting to offer restaurants the chance to boost their orders by 'bidding', which could get expensive for those involved.

As James Eling, managing director of Marketing 4 Restaurants is quoted in this article on Smart Company, said of the 'bid' approach: “This is quite scary, because you could be getting $2000 in orders a night, but if someone is saying they are willing to put a 15 per cent commission on their orders, Menulog [or equivalent] could put them higher up in the search rankings.”

Eling suggests restaurants should retain their customers' personal details and continue with their own marketing, as many restaurants find success through their own channels.

There will be many in the industry intrigued to see how UberEATS will perform upon arrival in Melbourne as, despite the prevalence of ride sharing service Uber, Victoria has yet to formally legalise UberX. There are plans to offer food delivery via car, bike and on foot, but the restaurants involved are not yet known, nor are the exact delivery fees or the mechanism of the service.

This could also be the beginning of other Uber products making their way Down Under, as the hugely successful California based company (currently valued at $86 billion) has two other products in its arsenal: a courier service and a carpooling service. Could it be UberDrinks or UberGroceries next?