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The New York Times has a story about how UberEats - the food delivery business owned by the disruptive ride-hailing company - is seen as a component that could be a big winner.

According to the story, “UberEats stands out even from the rest of the company’s fast-growing — and unprofitable — business. The delivery service, available in more than 120 markets globally, sometimes eclipses Uber’s main ride-hailing business in markets like Tokyo; Taipei, Taiwan; and Seoul, South Korea, the company said. The number of trips taken by UberEats drivers grew by more than 24 times between March 2016 and March 2017. As of July, UberEats was profitable in 27 of the 108 cities where it operated. Uber declined to reveal the service’s revenue.”

The Times writes that “Uber executives said UberEats … had several advantages over rivals. For one, Uber has a network of more than two million drivers who can also deliver food. Cars used for UberEats also do not need to pass all of the inspection standards required to carry passengers, widening the potential delivery labor pool. (Drivers need not own a car at all; UberBike is a popular delivery method for food orders.) Uber has also spent the better part of a decade mapping cities and finding the most efficient routes, which the company said may help improve delivery times.”

The story points out that “the competition is stiff. Postmates, which established a foothold six years ago, has raised more than $250 million, has more than 100,000 delivery drivers (the company calls them “postmates”) and makes 2.5 million deliveries every month. Grubhub, a public company, had $3 billion in gross food sales in 2016, with an active base of 8.17 million customers.”

And then, there’s Amazon … which “has teamed up with a company called Olo, which provides digital order and pay technology to 200 restaurant brands with about 40,000 U.S. locations, potentially giving Amazon access to a slew of delivery orders … The deal with New York-based Olo, which counts Shake Shack founder Danny Meyer as an investor, could bring fast-food restaurants like Chipotle, Five Guys and Wingstop to the Amazon Restaurants delivery service. Olo provides the technology platform to publish menus and take orders while Amazon arranges the deliveries.”
KC's View:
If the predictions are right, and the $10 billion fast food delivery business actually does pass $35 billion by 2020, we can expect a lot more competition and probably some more mergers and acquisitions. I can’t say I’m thrilled about an Uber driver delivering my food, but maybe that’s just me.