Dive Brief:

• McDonald's UK added Just Eat as a delivery partner, ending the chain's exclusive partnership with Uber Eats, which has been in place since 2017, according to The Motley Fool. 
• "Just Eat will come on board later in 2020 alongside our existing and valued provider Uber Eats, to help meet the demand which saw McDelivery account for more than 10% of sales in 2019," Paul Pomroy, McDonald's UK and Ireland CEO, said in a company statement. 
• According to CNN, about 15 million McDonald's are delivered each year in that market, or about half of Uber Eats' delivery business. 

Dive Insight:

McDonald's global delivery business is now worth over $4 billion in sales, McDonald's CEO Chris Kempczinksi said during an earnings call on Wednesday. With the end of this exclusive U.K. partnership, and the addition of Just Eat specifically, it seems as though McDonald’s is looking to grow the channel even more, and is doing so by focusing on cities outside of London.

"We now have multiple [third-party] partners in most major markets ... We continue to see great runway ahead of us to drive awareness and trial and we are doubling down on our efforts to encourage frequency and retention," Kempczinski said during the earnings call.

Just Eat is among the top providers in the U.K. and orders in the region grew 8% in 2019. The company should gain even more market share following its merger with Takeaway.com.

However, just as the CNN story implies, this is indeed another blow for Uber Eats, following the same fate in the U.S. in 2019 when McDonald’s U.S. ended its exclusive partnership. The chain added DoorDash and Grubhub last summer.

Underscoring the swift pace at which the food delivery category is moving, Uber Eats seemed to be on a much different course than just last year. In February 2019, Uber was poised to gain market share after Amazon Restaurants shut down its business in the U.K. Simultaneously, Just Eat was under activist investor pressure to grow more quickly. 

Now, Uber has fallen under pressure from investors to make a profit. As part of this effort, the company sold its food delivery business in India after failing to establish a top position there. That’s one way to reconcile some cash flow, but despite any progress, the end of McDonald's as an exclusive partner is a giant step backwards. Worse, analysts predict it could be at least four years until the company starts to make money on its orders. 

Still, despite these developments, Pomroy told CNN that the Uber Eats partnership has been "hugely successful." The end of the exclusive partnership could have more to do with the competitive landscape and the fight over market share versus any dissatisfaction from Uber. As Grubhub CEO Matt Maloney said in October, online diners are "becoming more promiscuous," meaning they're no longer loyal to one delivery platform or another. Such a trend doesn't bode well for a restaurant brand that exists solely on one channel, and perhaps that’s why exclusive deals are becoming less common in the space. 

Having multiple partners also provides restaurant brands with more leverage in negotiating commission fees, a big deal as operators grapple with those fees to meet increasing demand for delivery.