Just as news broke in late 2017 of a massive cover-up, Uber is expanding its food-delivery service, UberEats, to include restaurant reviews and a new business model that creates app-only virtual restaurants.
Just as Uber disrupted ride hailing, the new business strategy offers potential that, while still in a testing phase, could provide a new approach to local food options. Now, Uber drives food service.
These new services come as the company faces unwanted technology news that it paid hackers nearly $100,000 throughout 2016 to delete information stolen on 57 million users and nearly 600,000 Uber drivers. It remains to be seen what the impact will be of that disclosure on the company’s reputation and the comfort level of consumers and businesses to share additional information.
UberEats launched in August 2014 operates similarly to the ride-hailing service. Users enter a location and the application displays available restaurants. Meals are delivered via motorized vehicle, bicycle or on foot. Users pay a delivery fee in addition to the cost of food and an optional gratuity. Drivers for the Uber ride-hailing can also deliver for UberEats.
In November 2017, UberEats announced several new features. The first is the ability to rate restaurants and their delivery people on a five-point scale. Users can rate individual menu items with a thumbs-up or thumbs-down. App users can see reviews within the prior 90 days.
The more innovative new feature, presently in pilot mode, is the concept of virtual restaurants. These in-app-only sites inform participating restaurants of food searches from nearby users that do not match up with nearby eateries.
Those insights could allow kitchens with the equipment and skills to offer in-demand foods to fulfill a market demand and expand their menu offerings, even if only within the virtual Uber space.
The options that restaurants choose to leverage would only be available via the app. It also allows restaurants to collect and use information that’s often difficult to obtain, especially for smaller restaurants without the marketing teams or budgets to support such data collection.
The in-app rankings are an attempt by Uber to catch up with other services, such as Yelp, which has been collecting this information for much longer.
The app will also allow for personalized menu recommendations for consumers and easier functionality to find and recall info about favorite restaurants.
In an ongoing pilot, UberEats is providing insights to local restaurants to fulfill unmet demand.
“Through this type of work and exploration of data, we’ve started to gather really interesting insights on consumer demand patterns – what people are looking for, what are the elements that are going into this decision-making and choice,” said Ambika Krishnamachar, UberEats product manager, told techcrunch.com.
Restaurant Hospitality shares the tale of Chicago pizzeria owner Simon Mikhail, whom Uber approached in 2016 with the news that users in his area had been searching for “chicken” and that few local options were available. Mikhail worked with Uber to develop a virtual chicken restaurant available only via the app.
The virtual chicken spot sells fried chicken, chicken pizza, chicken tenders and brings in on average $1,000 weekly in sales, surpassing those of the pizza business. Mikhail is now considering a delivery-only burger concept.
While virtual restaurants are not entirely new, the notion of using data to pinpoint optimal locations is rather unique. The concept is being tested currently in Atlanta, Chicago, Denver, Philadelphia, San Francisco, and Toronto.