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In an effort to support independent restaurant owners and operators amid continuing challenges brought onto by the COVID-19 pandemic, the food delivery service Uber Eats is reportedly introducing their new initiative Eat Local.
In a press release, the head of Uber Eats and Delivery for the U.S. and Canada Stephane Ficaja said the company will be setting aside $20 million “through various initiatives” to help its restaurant partners find success in the coming months. Ficaja also said that Uber Eats would be setting aside $20 million through different initiatives to help its restaurant partners find success in the coming months. Moreover, microgrants totaling $4.5 million will be available to help the platform’s active restaurants meet pandemic-related financial challenges.
Other initiatives that Uber Eats plans to do include reducing and waiving fees for the eateries on its platform, with no added charge for order processing or pickup; canceling their fee to cash out daily through July in order to help owners have a steady flow of incoming receipts; and lowering delivery fees for consumers on all orders placed with independent restaurants.
Uber Eats said it will launch dedicated marketing campaigns to promote local restaurant delivery. Moreover, the company will reportedly match individual consumer contributions made through the Restaurant Contribution feature in Uber Eats.
The president and CEO of the National Restaurant Association Tom Bené reportedly applauded Uber’s support via their press release, pointing out that restaurants are still dealing with “unprecedented challenges.” “These microgrants will help independent restaurants stay open and continue serving their customers and their communities,” he said.
Unlike the ridesharing side of their business, Uber Eats escalated over the pandemic. Back in the fall of 2020, Uber Eats brought in more revenue ($1.21 billion) than rides ($790 million) in the second quarter of the year for the first time in the company’s history. Uber Technologies Inc. had reported a quarterly loss of more than $1 billion in Sep. 2020, as the COVID-19 crisis took a toll on its core business. Because of the effects of the COVID-19 pandemic, their revenue fell by 29%. Meanwhile Uber Eats bookings more than doubled from 2019, rising 103% to $1.21 billion. The company remains confident the momentum will continue even after the pandemic is over.
Reportedly, nearly 58% of all restaurant delivery sales in the U.S. are currently being made on food delivery apps, and it’s expected to reach 70% by 2022. DoorDash is the country’s industry leader with 50% market share. Last year, the tech giant Uber bought Postmates in an attempt to consolidate market share and boost profitability. Postmates is currently the fourth major meal delivery company in the U.S., and it earned 7% of the country’s meal delivery market in Oct. 2020.
With Postmates’s customers, Uber Eats can pull ahead in Los Angeles. As of Oct. 2020, Postmates is the top food delivery service in the city, according to data from Second Measure. Meanwhile, Uber Eats lags behind DoorDash and is on par with Grubhub.
Furthermore, Uber’s in-app restaurant contribution option will send funds directly to users’ selected restaurants, and it is also planning on matching funds up to $3 million.