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London’s Restaurant Delivery Market Hots Up Once More

The U.S. company will drop its cut from 35 percent to 30 percent

An Uber Eats bike courier rides around London with a branded rucksack Photo by Jack Taylor/Getty Images

Uber Eats has announced the launch of a “marketplace” format for its food delivery operations, as it seeks to muscle in further on the U.K. restaurant delivery market, recently valued at £8.1 billion. The brand will also cap its restaurant commission fees at 30 percent, as reported by MCA Insight and the Financial Times.

The move to introduce a marketplace — which Deliveroo introduced in June 2018 — is a direct affront to Just Eat’s model, whose market-leading breadth of restaurants has recently been eroded by Deliveroo and Uber Eats’s growing name recognition. Uber Eats’ name recognition increased by 24.2 percent in 2018, with Just Eat’s up 12.5 percent. While this is a condition of a less established company being ranked against a more established company, the combination of increased recognition and more developed technology is to Uber Eats’s and Deliveroo’s benefit and Just Eat’s detriment. Just Eat did grow its market share by 11 percent to 28 percent, according to the same research, likely bolstered by acquiring Hungry House for £200 million. This shouldn’t be discredited as an indicator of delivery tendencies — especially when the most ordered dish on Deliveroo in the U.K. is still a Five Guys burger.

The Uber Eats announcement comes in the same week that Just Eat announced plans to help restaurants with zero, one, or two star hygiene ratings on its platform to meet a new three star minimum standard; Deliveroo recently announced a new £0.50p service fee on each order that would, at the most conservative estimate, net the company nearly £11,000,000 a year in London alone.

Uber’s announcement also claims that “food delivery is expected to account for more than 10% of [the] total revenue” for restaurants on the platform that are classed as small or medium sized business — highlighting the extent to which delivery can be a financial bind, as much as a benefit.

Eater has contacted Deliveroo for a statement; Uber Eats’ general manager for the U.K. market, Toussaint Wattine, said: “We strongly believe this will help restaurants big and small thrive long in to the future, while vastly enhancing selection for users.” Wattine appeared on an Eater London panel discussing the impact of restaurant delivery on the city in 2018.

More soon.

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