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Uber’s industry-hopping tactics bring the brand to mobile ordering

Uber, which has eclipsed its ride-sharing competitors by engaging in a slew of brand partnerships and consistently expanding its services, is now enabling consumers in select cities to order food delivery from local restaurants via a standalone application.

The UberEats app is gearing up to throw some competition toward mobile ordering stalwarts such as Seamless and GrubHub as it targets food lovers in Toronto, Chicago, San Francisco, Los Angeles and Houston. Consumers in these cities will be able to order meals from their favorite neighborhood restaurants and have the food delivered to their homes by an Uber driver.

“Any company that revolutionizes the car-hailing space as effectively as Uber deserves a sky-high valuation,” said James McNally, senior manager of business development at Prolific Interactive. “But what really gets investors stratospherically excited is the potential Uber has to revolutionize and own additional verticals, including delivery, and bundle these together as a ‘one-stop’ resource for goods or services.

“Eats isn’t likely to be a short term game-changer for Uber (the company can already mark ‘change the game’ off the to-do list), but if it’s successful, it will go some way towards proving the company can do more than hail cabs,” he said.

“Uber knows a thing or two about entering very analog service and logistics businesses, and competing against entrenched players, but food delivery will present a whole new set of logistical challenges, especially outside of major metropolitan markets.”

Upping the ante
Uber has recently been engaging in one of the strongest advertising blitzes in its industry. In addition to allowing consumers to hail a ride through means other than the company’s app – such as via Facebook Messenger – the car service is now branching into mobile ordering, an extremely lucrative sector.

Consumers in the aforementioned markets can download the new UberEats app for their iOS or Android devices. Individuals in Washington, D.C., Seattle, Atlanta, Austin, New York, Paris, Dallas and Melbourne will receive the service shortly.

Uber is joining forces with these cities’ restaurants to expand their delivery distances and help them reach new customers. The standalone app will let users discover and purchase food before following the order as it arrives to their homes – all via their smartphones.

Therefore, consumers craving a specific snack at any time of day, any day of the week, can select food from hundreds of local eateries’ menus. Those in a serious time crunch can take advantage of the Instant Delivery menu feature.

Instant Delivery sees Uber drivers continuously pick up meals in temperature-controlled bags. Local restaurants prepare these meals at a rapid pace during peak dining times, meaning that there will always be available food if a customer places an immediate order through the app.

Undecided individuals can also browse each restaurant’s most popular dishes to receive some inspiration before making a purchase. They may also search by type of cuisine.

Implications for competitors
This new service does have the potential to raise the competition stakes among Seamless and GrubHub, two heavyweights in the food delivery industry.

“Seamless and other food delivery services should expect Uber to grab some market share, if for no other reason than Uber’s contractor (driver) network, and its impressive tech infrastructure,” Mr. McNally said.

Uber has also partnered up with a smattering of major hotel brands, which has considerably expanded its audience outreach.

InterContinental Hotels Group is the latest hospitality marketer joining forces with Uber, allowing new users to receive a rewards points bonus for signing up and integrating ride-hailing abilities into the IHG mobile app (see story).

Uber’s major strides in its industry may consequently force other ride-sharing services, such as Lyft, to up their game and attempt to garner more brand partnerships. Additionally, the rise of copycat UberEats apps is a possibility.

“Whether or not Lyft or other Uber competitors should attempt food service depends on their appetite for risk and their business goals,” Mr. McNally said. “Uber is very much on its own path, with its own ambitions – and there’s nothing wrong with being ‘just’ a successful ride-hailing app business.

“Diversifying makes sense for some businesses, and no reason not to capitalize on infrastructure that’s in place, but aside from capital expenditure, there are plenty of reasons why a business should focus on optimizing its core service,” he said. “Also, in 2016, food delivery isn’t a super new space where a land-grab tactic should be seen as crucial.

“Seamless and GrubHub already dominate the market, so Lyft might do well to take a fast follower approach here, if in fact it does want to tackle food delivery.”