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Morning Briefing for pub, restaurant and food wervice operators

Thu 21st Feb 2019 - Uber to cut food delivery fees as battle with Deliveroo and Just Eat hots up
Uber to cut food delivery fees as battle with Deliveroo and Just Eat hots up: Uber will cut fees for food delivery in the UK and Ireland and allow restaurants to use its app but carry out their own deliveries as competition hots up with Just Eat and Deliveroo, the Fininancial Times has reported. Uber Eats will limit the fees it charges to restaurants at 30% of the value of an order, compared with a current maximum fee of 35%. It will also introduce a “marketplace” in the UK, Ireland and the Netherlands, to capture restaurants that want to be listed but make their own deliveries. It represents the “first step” to further international expansion, said Rodrigo Arévalo, the head of Uber Eats in Europe, the Middle East and Africa. Until recently Uber Eats and Deliveroo have mainly used their own couriers to deliver to customers, while charging restaurants higher commissions. “It’s no secret that the industry where we’re playing is highly competitive,” Arévalo told the FT. The FT stated: “Uber’s food delivery business is an important part of its pitch to investors as it prepares for an initial public offering that is expected this year. Uber Eats is on track to deliver $10bn worth of food orders this year, up from $6bn in 2018, according to projections from Uber. It is the first business outside the company’s core ride-hailing business that has achieved significant scale and growth. But the competitive nature of food delivery, and the need to pay a cut of food sales to both couriers and restaurants, has meant Uber Eats and its rivals are burning through cash to fund their expansion and keep prices low. The share Uber keeps from food deliveries, after paying couriers and restaurants, is on average lower than the cut the company takes from rides. Uber Eat’s decision to launch a marketplace comes as takeaway apps experiment with new ideas to gain an edge over rivals. In the US, DoorDash and Postmates have both launched subscription offers that waive delivery fees on orders in exchange for a flat monthly payment. DoorDash, which like Uber has the backing of SoftBank’s Vision Fund, overtook Uber Eats in terms of US market share in November, according to Second Measure, a research group that analyses anonymised credit and debit card data.” 

Propel insights editor Mark Wingett to give his views on deals that could happen in the sector: Propel insights editor Mark Wingett will give his views on the M&A activity that could happen in the sector as part of his next article for Premium subscribers, which will be sent out on Friday (22 February). He will also continue his outline of what he believes lies ahead for the sector’s big pub operators and look at the curious case of the Wasabi investment process. Propel Premium subscribers will also receive a 30-minute video on Friday featuring Ei Group chief executive Simon Townsend talking about how the company was galvanised to meet the challenges of a completely new business model. Propel Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before our 6am send-out, access to our database of 1,300 multi-site companies, discounts to attend Propel conferences and events, and regular video recordings of key speakers from Propel events and conferences. An annual premium subscription costs £345 plus VAT for operators and £445 plus VAT for suppliers – plus £50 each for additional team members. Email

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