Uber launches UberEats food delivery service in Russia

Uber launches its own food delivery service called UberEats in Russia, Vedomosti reports . UberEats will work as a separate UberEats application. According to the publication for today, February 15, scheduled presentation of the new service.

UberEats was launched in 2014 in the US and is already successfully operating in 20 countries around the world. For example, in New York, the service cooperates with hundreds of cafes and restaurants, and the average delivery time is 30 minutes. UberEats operates in many European capitals, Southeast Asia and South Africa.

Uber did not deliver food from a good life. The company is bogged down in debt and is now eating the money provided by investors. Thus, only in the third quarter of 2016, Uber's net loss amounted to $ 800 million. To keep afloat, the company invests in the development of robotic vehicles, and also searches for new markets. One of them - the market for the delivery of food from cafes and restaurants.
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This direction is considered promising in Uber, and company representatives are hoping for an early expansion of the service’s geography. Testing service began last week in Moscow.

Liberal Uber tariffs can not be called. For establishments that have connected before February 1, the Uber commission for delivery will be 30% of the order amount, for those who connect later - 35%. At the first stage, UberEats plans to operate within the Garden Ring and in the North-West of the capital. One of the first major customers of UberEats will be the Burger King fast-food chain and the Shokoladnitsa coffee chain.

The pricing mechanism for delivery is not yet clear, but it is worth noting that this market has long been divided between other market players. In addition, many institutions have their own delivery services and are unlikely to agree to the enslaving conditions of UberEats. Public catering is now difficult to call a high-margin business with super profits.

So, the founder of "Dodo Pizza" Fedor Ovchinnikov at the end of January, announced the refusal to work with the universal delivery service Delivery Club. “The current Delivery Club business model is not aimed at long-term mutually beneficial cooperation between the aggregator and pizzerias on the win-win principle. From my point of view, in the current form for us it is a business parasite that does not bring any value to the networks in the long run, but only losses and dependence, ”he said. Ovchinnikov also spoke about the margins of a business aimed at delivering food. At Dodo Pizza, it makes up 15-25% of the order amount. With this, the Delivery Club took 20% commission from each order, which resulted either in easy losses or to work “to zero” on the part of the pizzeria chain. The current owner of the Delivery Club in Russia is the Mail.ru Group company, which bought the service in November 2016.

As mentioned above, the UberEats commission on each order is 30-35%. This automatically increases by one-third the cost of food for end-users, or it dismisses the possibility of UberEats cooperating with small cafes and restaurants that are not ready to work with a near-zero margin.