Uber Eats’ Chain Partnership Strategy Is a Risky Business
Photo Credit: A significant amount of Uber Eats total sales come from restaurant chain partners, which it offers discounted rates to. Uber Eats
Skift Take
Uber Eats and Grubhub have both publicly cited losses on discounted fees charged to chain partners in financial documents. One can only imagine the case is the same for DoorDash, who's IPO is likely not far behind.
The fortunes of Uber Eats, the fastest growing part of Uber right now, are tied to its reliance on a handful of partnerships with big chains that include Starbucks and McDonald's, Uber's IPO filing documents show.
Uber Eats' exclusive agreements with international restaurant companies aided the company in generating $1.5 billion in revenue last year. The number easily surpassed Grubhub’s $1 billion revenue output over the same period, though Grubhub operates only in the U.S. and a handful of international cities.
But the food deliverer also confirmed what the restaurant industry has known for some time: Chain partners pay discounted rates for Uber Eats’ services that are less than the 30 percent commission fees it demands from smaller unit restaurants on its platform. And it is taking its toll.
The move is inten
