How Does Uber Eats Work?

Published October 27, 2020 | Author: PenMyPaper

Uber Eats is atechnology-basedservicecompany, which operates as an online food delivery platform. It is headquartered in San Francisco, California, and functions as a subsidiary of its parent company Uber Technologies Inc. Uber Eats a perfect example of how a company can use modern information and telecommunication technologies to deliver remarkable services for the public. The company has been able to gain significant popularity among its users, which is reflected in the steady growth in its market share.

Uber Eats operates with a very unique business model, which facilitates delivery of food to the customers from their chosen restaurants. Learning about how Uber Eats work can help to work any case study which follows the same business model. Moreover, you can also use this approach to develop you own business plan.

The Business Model of Uber Eats

Before we get into details of how Uber Eats work, let us first look at the who are its stakeholders and what values do they benefit from. The company operates with key stakeholders, which are the restaurants, the users ordering food, and the delivery personnel. First of all, Uber Eats enables the restaurants to cater to a much bigger customer base, resulting in more revenue. The users benefit from the service offered to them, where they can seamlessly and conveniently order food from a large selection of restaurants, without stepping outdoors. Finally, the delivery personnel receive a remuneration for their services.

Now that we have established the stakeholders and the values offered to them, we can look at how Uber Eats working to grow and sustain their business. This will guide you in your assignment so that you don’t require any university assignment help.

Uber Eats partner up with as many restaurants and eateries as possible in a given location. This partnership allows these business owners to list themselves in the Uber Eats platform. So, Uber Eats now has list of restaurants, with their respective menu items and prices, and even user ratings. A user who wants to order in some food items can now visit the Uber Eats platform, via his smartphone application or a web browserand search through all the restaurants in the nearby area. The user can only browse restaurants and eateries that have partnered up with Uber Eats.

After browsing through the nearby restaurants listed in the Uber Eats platform, the user can then finalize some food items from his chosen restaurant and place the order. The user is asked to pay for the food item while placing the order. Uber Eats now has the details of the order, the contact information of the user and the delivery address in which the order is to be delivered.

Once, the order is placed by the user, the restaurant gets a notification in their tablet, smartphone or web interface of Uber Eats. The application shows the food menu items ordered along with its order number. The restaurant then accepts the order from the application and starts preparing it.

The moment the restaurant accepts the order, a delivery person is notified in their smartphone application about the location of the restaurant, the location of the user that is the delivery address and the order number. The delivery person then reaches the restaurants and enquires about the order by the order number. As soon as food is prepared and packaged, it is handed over to the delivery person, who then begins their journey to the delivery location. The user who placed the order is also notified that their order is on the way and they can track the location of the order in the Uber Eats application.

Uber Eats relies on its seamless set of interconnected interfaces which connects all three stakeholders together. It should be noted that all the three stakeholders, the app users, the restaurants and the delivery personnel, each have their own platform interface and are different from each other. However, all the three applications connect to the centralized server which allows the backend executives to monitor every order and its delivery activities. Uber Eats has made it easier for the customers to buy food from restaurants, thereby allowing the restaurants to serve more customers. The users can purchase food from any partner restaurants just by sitting at home or office and Uber Eats deliver personnel will be there to deliver the food. Thus, as mentioned previously, the users receive convenience from the delivery service, the restaurants can earn more revenue by selling more food items and the delivery personnel can earn remuneration for their service. Now let us look at how Uber Eats make money. It can help you to get better idea about the success of the chosen business plan and will also enable you to apply in your own papers, without asking someone to write me an essay.

How Uber Eats Make Money?

The revenue stream of Uber Eats come from two different sources. Whenever, a user places an order from the Uber Eats application, he/she pays a delivery fee to the company, based on minimum order value and distance between the delivery location and the location of the restaurant. The company also has a subscription model offering additional benefits to the users, which also contributes to the revenue of the company.

The second stream of revenue comes from the restaurants. In order to partner with Uber Eats and have themselves listed for the app users, the restaurants are required to pay a one-time registration fee, which ranges from USD 350 to USD 500. Along with that, Uber Eats takes 30% of each order value from the restaurant. It has been often argued that this commission is quite steep for the restaurants to pay, but restaurants can still make a higher revenue owing to economies of scale, as it is able to cater to a much larger number of customers.

This business model has proved to be quite successful for Uber Eats, which is clearly highlighted in its revenue generation over the past few years. Uber Eats recorded a revenue of USD 600 million in 2017, which increased to USD 1.9 billion in 2019. The success of this business model has attracted a lot of competitors in the market as well, such as Doordash, Grubhub, Postmates, etc.

Thus, the revenue of Uber Eats comes partly from its users and from the partner restaurants. Over the past few years, this business model has become quite popular and is being adopted by other companies as well. Learning about how Uber Eats work can also help you in understanding how other companies operating in the same sector works as well.

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