Uber Goes Old School With New Delivery Services
With a pandemic suppressing the world’s need for transportation, Uber has kept itself busy by offering free rides to healthcare workers and expanding its food-delivery service, Uber Eats. Initially, that meant activating the program in more countries. The ride-hailing company has since added ways for businesses to manage meal plans for employees working from home while attempting to supply drivers with masks and disinfectant sprays.
This week, the company said it will expand the ways in which customers interface with these services. But this new method has been popular for well over a century. In a bid to encourage older Americans to use its food-delivery services, Uber has implemented a telephone line designed to help Luddites trapped in their homes. Customers can now dial a toll-free number and discuss menu options with an Uber representative who will help then finalize and pay for their order.
We mistakenly assumed the company already had something like this in play; however, Reuters reports that this is the first instance of Uber allowing patrons to access delivery services outside of its app. It did launch something similar for its core business earlier this year after leaning older customers were having issue with the standard channels, though that program is currently only active in Arizona and Florida. Meanwhile, the food hotline will be tested for residents in New York City and Miami.
An Uber spokesman said the company at the time conducted focus group studies showing that older adults struggled to use technology despite having a need for Uber and transportation — lessons it now seeks to extend to its food delivery business.
While taxi companies and restaurants for years have allowed customers to book a cab or order a food delivery over the phone, app-based services relying on cheaper independent contract workers have been able to expand thanks to lower costs and the convenience of online booking.
But food delivery companies like Uber Eats, GrubHub Inc., DoorDash Inc. and Postmates Inc. have faced criticism over the high fees they take from independent restaurants, often eating up already-thin profit margins.
Despite Uber Eats being a continuous money loser for the firm, the company said it’s seen a significant increase in customers amid the coronavirus pandemic. It also said the number of delivery drivers signing up for the service doubled in mid-March, stopping short of giving up the actual metrics. Meanwhile, we know from an investors call on March 19th that the core business has taken quite the hit.
CEO Dara Khosrowshahi said ridership in Seattle was down by 60 to 70 percent, adding that the number was probably the same for most major metropolitan areas. At the same time, he offered assurances that the business had sufficient financial reserves to endure a period of economic inactivity. Khosrowshahi said the company has $10 billion in unrestricted cash at the ready, in addition to $1.5 billion it had set aside for mergers and acquisitions for 2020. Pretty impressive for a company that has never once posted a profitable quarter.
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It's always good to see a company showing some flexibility. They do at some point have to start making money, though....