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Why UberEats Can't Be the Uber of Food Delivery

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UberEats is facing many challenges.

Uber

How successful can personal driver service app Uber really be in the food delivery space? According to the Wall Street Journal, the company — which may soon be worth $50 billion — is facing many hurdles in its quest to dominate the industry. Last year, Uber started testing its meal delivery service UberEats (which was then known as UberFresh) in Los Angeles and Barcelona. In April, the company expanded the service— which offers daily rotating options from restaurants for curbside delivery — to New York City and Chicago.

While a spokesperson tells the paper that the response to UberEats "has been overwhelmingly positive" and that the service could expand to 15 cities in the near future, data shows otherwise. Sometimes UberEats has "so few customers that drivers have to throw away food at day's end."

Uber has also had a number of partnerships fall through in recent months. The company was in discussion with Starbucks to make deliveries in certain cities, however, the coffee company went with start-up courier service Postmates instead. Uber was in talks with food ordering app Eat24 (which is owned by Yelp) and with GrubHub to partner on deliveries, but Uber has not reached agreements with either company.

The Wall Street Journal adds that delivering food creates an additional set of challenges for Uber drivers. The drivers have to get out of their cars to pick up the food, store hot items "in heated bags plugged into their car's cigarette-lighter," and often have to park illegally while "they wait for customs to show up at the curb."

However, many drivers find that there are benefits to the UberEats program. It gives drivers a way to stay on the road and earn income between 10 a.m. and 2 p.m. when demand is usually slow. Ramsay De Leon, an Uber driver, explains that "as a driver, [UberEats] is a win-win": "We dedicate three hours of our day, and with a guaranteed base [pay] plus commission, it's well worth your time."

Still, De Leon doesn't believe Uber will be able to "disrupt the food-delivery business as much as it has with taxis" because it would be difficult for the company to offer more than a few menu items per day for delivery. Additionally, there is still some customer confusion: Many times app users accidentally order UberEats when they are trying to request a regular Uber. Oops.

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