Insights into Uber Eats Business from Uber's CEO
Uber's CEO Dara Khosrowshahi recently shared 3 great insights about the Uber Eats business on the Acquired podcast. Learn how Uber Eats gets more traffic from Uber, how it is a complimentary business to rides, and how it can grow customer lifetime value.
Rahul Mathur
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Last week, Uber's CEO Dara Khosrowshahi shared 3 great insights about the Uber Eats business on the Acquired podcast:
— Rahul Mathur (@Rahul_J_Mathur) June 23, 2023
(1) Uber Eats gets more traffic from Uber as compared to any other source 🤯 -
- This is true for both demand (customers wanting to order) and supply (riders wanting to deliver orders) acquisition
— Rahul Mathur (@Rahul_J_Mathur) June 23, 2023
- Remember the Uber Eats ad placement in your Uber app? that's the trick!
💸 Uber Eats is a complimentary biz to rides - great way to grow LTV from an Uber user. -
(2) Nothing is free from Uber
— Rahul Mathur (@Rahul_J_Mathur) June 23, 2023
- Uber Eats has to pay an internal CAC for using otherwise chargeable ad slots on Uber app (from an accounting perspective, there is no cash moving)
- Classic opportunity cost calculation since the ad inventory contributes to the core Uber rides P&L -
😑 If you run a business unit inside a large company, everything is chargeable (including the corporate office rent)
— Rahul Mathur (@Rahul_J_Mathur) June 23, 2023
(3) Uber Eats versus Doordash ⚔️
- Uber Eats had previously focused on city centers where the core Uber Trips business was active -
- Hence, Eats was optimized for short delivery time and cost hence Eats prioritized nearby & urban restaurants
— Rahul Mathur (@Rahul_J_Mathur) June 23, 2023
- Whereas, DoorDash focused on suburb i.e. larger family placing orders and customer is okay with longer delivery time -
💡 Fundamentally, Uber & DoorDash were in same local restaurant food delivery category but catering to different audiences - urban v/s suburban.
— Rahul Mathur (@Rahul_J_Mathur) June 23, 2023
But, things are changing:
(a) Uber Trips is entering the suburban segment; which means Uber Eats is coming to DoorDash's home ground -
(b) Uber is thinking beyond restaurant food to alcohol delivery via Uber Eats (high margin & highly regulated hence acquired Drizly for $1.1bn)
— Rahul Mathur (@Rahul_J_Mathur) June 23, 2023
(c) Uber is investing in its B2B freight business (grown x7 in 2 years from $1bn to $7bn revenue) -
Overall, Uber continues to innovate despite its scale - would highly recommend you hear Uber's growth plans from their CEO on the @AcquiredFM podcast:https://t.co/ksFcYIQhG6
— Rahul Mathur (@Rahul_J_Mathur) June 23, 2023