UberEats takes a bite out of Europe, the world

UberEats, the on-demand meal-delivery service, has announced plans to expand in a number of European cities, a move that gives Deliveroo strong competition in the food-delivery business.

The offerings have opened up opportunities for hotels to provide food for non-guests, but also challenges existing roomservice.

At UberEats, which Uber describes as "a start-up within a start-up," the product is currently operational in 18 cities globally, and, the group said, “has seen strong Uber-like growth everywhere we've launched." Paris was the first city in Europe to launch its stand-alone UberEats platform, followed by London in mid-June.

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It's now spread to Brussels and Amsterdam, and will launch in more EMEA cities (it's currently available in five Australian cities, four cities in Asia and Johannesburg.)

Multiple Players

The company is joining a busy market, with Amazon having launched its free one-hour restaurant deliveries to its Prime customers in London in September. More than 180 restaurants have signed up to Amazon's new service, including pizza chain Strada, the Michelin-starred Indian eatery Benares, and salad chain Tossed. Amazon promises to deliver meals to 21 London postcodes within an hour.

The news came as Just Eat, the online takeaway group which launched 10 years ago, invested GBP3.5 million to take a 38-percent stake in mobile payment app Flypay. Julio Bruno, CEO of Just Eat parent Time Out Group, said: “We invested in Flypay because it's a hugely innovative company. It's Flyt platform enables B2B integration between numerous technology-based services in the world of hospitality, from bookings, payment and loyalty, right through to delivery and reviews.”

According to a study from CGA Peach earlier this year, more than half the British adult population have had takeaway brought to their door in the last six months.The figure equates to 28.6 million British consumers getting food delivered. One in five gets a delivery at least weekly, and two in five get a takeaway at least monthly.

The company said: “The stats show the massive scale of the delivery market now, as well as some interesting trends and shifts in the sector. Traditionally dominated by independent operators, the market has seen the arrival of several big third parties lately, offering digital platforms from which consumers can order food.”

Of these, Just Eat is the market leader by some distance, having been used by a third of those who have had food delivered in the last six months. Second and third are Hungryhouse (15 percent) and Deliveroo (9 percent). The second of these has been busy signing up some major casual dining brands for deliveries lately, and has doubled its user base in the last year, CGA Peach data shows.

Hotel Use

The hotel sector, however, has not, as yet, been quick on the uptake. Across Deliveroo’s portfolio, only three hotels were listed at the time of writing: Galvin at Windows, Chicken Shop at The Hoxton Holborn and Kiosk at the Great Northern Hotel.

Jeremy Robson, chairman at RAM, owner of the Great Northern Hotel, told us that he was a big fan of Deliveroo: “At home and work, as my expanding waistline and diminishing grocery store spending attests.”

He added: “As a business we have always sought to focus our approach on the customer rather than blindly adopting tradition hospitality practices and see similar qualities in Deliveroo. It is a rare example of an online platform that has created real new economic value rather than feeding off existing sector revenues.

“From a practical perspective Kiosk (famous for hot roast meat sandwiches) benefits from a loyal customer base who frequently travel to enjoy our product and it is hugely positive we can make this more convenient for them. “In pure revenue terms, it's a small but significant part of our business, however the value it brings us in convenience to our existing customers and in increasing our profile is very valuable.”

When considering the impact of partnering on the Great Northern brand, Robson said: “We take great care when associating ourselves with other brands and in considering whether our cultural values fit. Deliveroo works perfectly for us with Kiosk in the same way that brands we have worked with on the Great Northern Hotel, such as Fortnum & Mason, Liberty, the British Library or Malin & Goetz are excellent partners.”

The hotel’s F&B offering also includes Plum & Spilt Milk, lead by Michelin-starred chef Mark Sargeant.

Robson added: “We won't use Deliveroo for Plum & Spilt Milk. The restaurant is one of London's top fine dining destinations and we don't think a delivery service is appropriate for its style of offer and market segmentation.”

At Hilton Worldwide, the company is currently undergoing a one-month trial offering fine dining to takeaway courtesy of Galvin at Windows, with a specially-created £35 menu. Andrew Sicklin, restaurant manager at Galvin at Windows, said: “Deliveroo is renowned for its high quality and professional delivery service and is the ideal partner for the restaurant to branch out into at-home dining for the very first time. We are looking forward to offering customers the opportunity to experience our cuisine in a brand new environment and hope that this will give even more people the opportunity to experience what Galvin at Windows has to offer.”

Nick Green, head of sales, Deliveroo, said: “Michelin-starred food in the comfort of your own home—who wouldn’t want to impress a special someone with a date night in to remember? The menu has been specially created for our customers to offer an extra special twist on the usual weeknight takeaway—Michelin-starred, seasonally-inspired food delivered straight to your door.

As for the impact of the delivery companies, one observer of the restaurant sector, who declined to be named, told us: “This is the truth that dare not speak its name—nobody wants to admit that Deliveroo is driving like-for-like sales and is quite so influential. The jury is also out on how it will impact brand, quality, customer satisfaction and also how often people dine-in.”

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