Rideshare giant Uber and online shopping behemoth Amazon have been expanding into the food delivery sector recently, following in the footsteps of many startups across the country. Companies such as GrubHub, Postmates, and Seamless, which charge restaurants roughly 12 to 24 percent of checks to use their services, have successfully blazed the trail, but UberEats and Amazon Prime Now are asking for a much steeper rate, reports the New York Post.
Amazon is looking to take a 27.5 percent chunk from partnered restaurants, and Uber is going a step further at 30 percent. The team behind UberEats says charging any less would be "unsustainable," according to the Post's sources.
Atlanta-based chef and restaurateur Ford Fry operates 10 eateries in the city, plus another in Houston. Valerie Mosley, a representative for the restaurant group, tells Eater Fry is considering a partnership with UberEats when its expanded delivery service launches in March. While she wouldn't confirm the 30 percent charge reported by the Post, she said the chef has "no complaints" over UberEats's pricing.
Fry has embarked on a limited partnership with UberEats's current lunchtime operation, and while a final decision hasn't been made on the future, Mosley said "the convenience alone is worth us participating." Fry and his team prefer UberEats over competing delivery services because "they are organized and we were impressed with their delivery system. They also worked closely with us regarding the meal choices — they have made helpful suggestions regarding what sells best and why."
In addition to the cut it takes from restaurants, the Post notes UberEats will charge customers $5 per delivery order, which is close to what other startups charge. Amazon Prime Now currently does not have plans to charge delivery fees: "They're still trying to really figure out what this is," one source told the Post. "Is it [a customer] acquisition strategy for [Amazon Prime], or something they'd like to open up to the broader public?"
Until now, UberEats has deployed as a niche operation in 10 cities across America, catering to the working-lunch crowd. But when it relaunches in March, the service will operate from morning through evening, serving from dozens of restaurants in each city. The company began a trial run of the new service in Toronto late last year, and it officially announced expansion last month. The new UberEats will first launch in Washington, D.C., San Francisco, Atlanta, Houston, Seattle, Dallas, Los Angeles, Chicago, New York, and Austin, and more cities expected to come after that.
Amazon Prime Now restaurant delivery has been expanding market-by-market in recent months. After starting with a test in Seattle last August, it has since launched in cities such as Los Angeles, Baltimore, and Austin. Restaurant delivery Amazon's forays into the booze and produce delivery sectors.
Update: February 10, 1:30 p.m. A spokesperson for Uber provided Eater the following statement:
"UberEats delivers delicious meals at menu price, plus a clearly marked delivery fee. In exchange we charge the restaurant a modest service that in most cases is less than the cost of operating their own delivery service. Our goal is to grow the pie for everyone, rather than servicing a narrow niche of customers willing to pay stunning high mark-ups."
Representatives for Amazon did not respond to an Eater request for comment.