Is Uber Eats Worth it for Restaurants?

Like any other business, restaurants are continuously looking for ways to increase sales and gain extra customers. Many of them are looking to food-delivery services such as Uber Eats, DoorDash, and others, but is this really worth it for them? It seems like a no-brainer; after all, it gives them an easy way to get more orders, which automatically means more money in their pockets.

If this is the case, why do so many restaurants decide not to use these services? If you take a closer look at this phenomenon, you’ll find that while many restaurants love Uber Eats and services like them, many others do not, and there are good reasons for that.

Uber Eats for Restaurants –The Opportunities

When a restaurant signs up to partner with Uber Eats, they get an exclusive Uber Eats profile page that can only be found on the app. This means the restaurant controls its own marketing with a high-end visual presence to help them stand out from competitors.

Restaurants can offer promotions and loyalty programs and can track performance, all within the Uber Eats app. These are some of the opportunities that restaurants can obtain by partnering with Uber Eats.

Streamline Logistics by Outsourcing Deliveries

Restaurant owners know that it is important to be part of the “delivery business boom”, but some restaurants have a small staff. Using their own employees to make the deliveries means they have to hire more people.

Why worry about all the time and money needed to set up your own delivery system. By outsourcing deliveries, they don’t have to worry about hiring, training, and pay skilled drivers. And how about the headache of providing insurance– Uber Eats can take care of all that!

Win New Customers at a Bargain

Every time a new person orders from the Uber Eats platform, the restaurant gains a potential new customer.

Partnering up with Uber Eats means that a restaurant can open its doors even wider. Reaching out to new potential customers in areas where they might not otherwise be able to get its delicious dishes.

And they may not become just online customers. They may become dine-in customers as well.

Keep Busy During the Slow Times

You know it is raining hard, and customers are not likely to come to a restaurant. No worries! Restaurants can bring their food to them.

Instead of expecting low revenue due to rainy days or any other reason, they can continue to earn additional income by offering Uber Eats delivery.

Offering Regular Dine-In Customers Flexibility

Every restaurant has a tribe of die hard customers. You know those customers that are there every single week no matter what. Those customers may want to have that delicious food more often, but just don’t want to go to the restaurant every other day.

You know, it gets to a point that it’s awkward. But if the restaurant offers Uber Eats delivery, it may mean more sales from these regular dine-in customers.

Uber Eats Restaurant Partner Positive Stories

Uber Eats for Restaurants –The Challenges

But not everything is rosy in the restaurant delivery world. Naturally, there are some drawbacks to consider.

Restaurant Fees

All delivery services add a fee that the restaurant has to pay for making the deliveries. Currently, Uber Eats and DoorDash charge higher fees than other services do.

As of this writing, Uber Eats adds up to 30% of the price of the orders to the entire order, and if you negotiate with them, you can sometimes pay a lower fee. But even the lower fees stay at around 20% to 25%, which is still quite high.

To restaurants that are smaller or haven’t been in business long enough to be making a lot of money, that fee can be crippling. Even with extra orders coming in, some restaurants find the fees are so high that they cut into their profits quite a bit.

Issues with Food Delivery

Like any other business process, delivering food is not without potential issues. Two of these potential issues are late delivery or bad food and how to stop these delivery services from letting customers place orders too late in the evening.

If a customer orders from Uber Eats and the food is unsatisfactory or the order arrives late, in most cases, it is the restaurant itself that suffers. Most customers will not call Uber Eats directly; instead, they’ll call the restaurant and complain.

But the restaurant doesn’t have much control over the food arriving late or the food being too cold. The fault usually falls on the driver, who in turn may not have control over how far the location is or bad traffic.

Another problem that people don’t think about is late orders. Let’s use a barbecue restaurant as an example. Sometimes, their meats – ribs, briskets, and so on – take hours to cook, but if a customer places an order too late in the evening, the restaurants don’t always have time to cook enough to fill the order.

This leads to only two possibilities – cook the food and stay open much later than they usually do, or tell the delivery service “no.”

Neither of these is a good option for the customer, so it really puts the restaurant in a dilemma. All restaurants want to offer excellent customer service and delicious food, but when they use a delivery service, some of that is out of their hands, and the results can be devastating to them.

A Critical View of Food Delivery Services

This video from CNBC offers a critical analysis of food delivery services and questions whether platforms like Uber Eats and DoorDash are good for restaurants.

Restaurants Have Other Options

Ultimately outsourcing food delivery is an option, a tool available to restaurants. Like any other tool, it may not work for everyone for various reasons.

Restaurants that don’t want to use it have cheaper options. They can shop around and see what other delivery services charge, as it’s a good chance they’ll be a lot lower than both Uber Eats and DoorDash.

They can also keep the delivery service they have but try to negotiate the fee to get them to lower it somewhat. This is very successful in many instances.

Many restaurants are now offering discounts for customers who pick up their orders. Even a 10% discount is enough to make customers happy, and in the end, the profits on these orders will be higher than they would by using a delivery service – even with the discount the restaurant offers.

The true price of a $6 sandwich delivered with Uber Eats 

As you may know, I recently decided to deliver with Uber Eats to meet my income goals. I thought it would be interesting to break down the costs associated with one of my recent deliveries —a $6.40 sandwich!

Meal Price$6.40
Delivery charges$7.49
Total Customer Cost$16.89
Restaurant Fee$1.28
Base Payment$2.96
Total Driver Earnings$13.84

This was a particularly satisfying delivery for me. I delivered it to a school teacher who told me that she realized that the food she had in the school fridge had spoiled. And she was hungry! Naturally, I was happy to help.

It is incredible how much money gets moved around for a $6 sandwich, but what is more surprising to me is that the end result was happy people:

  • The customer because she got her lunch
  • The Uber Eats driver because he made $14
  • The restaurant because it got an additional sale

This is what I call a win-win all the way around!

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