Uber Eats earmarks $20M in expansion of independent restaurant support

Dive Brief:

Uber has launched Eat Local, a $20 million program to support independent restaurants during the pandemic.
The package includes $4.5 million in microgrants to support Uber Eats and Postmates restaurant partners; 0% fees for pickup orders and those processed on restaurant websites through June 30, as well as for daily payouts; reduced delivery fees for consumers who order from independent restaurants; dedicated marketing campaigns to promote delivery; and a match to all consumer contributions through the Uber Eats Restaurant Contribution app feature. There will also be a $0 delivery fee from Feb. 3-7 in preparation for the Super Bowl.
Many of Eat Local's initiatives are an extension of support provided throughout the pandemic, but could help struggling independent restaurants stay afloat. These programs do come at a cost. While Uber reports earnings on Feb. 10, Grubhub noted yesterday in its earnings call that it had a net loss of $67.8 million, in part because it spent more than $50 million to help local restaurants.

Dive Insight:

The Eat Local campaign builds on previous efforts from Uber Eats to help its restaurant partners who are increasingly relying on delivery orders. At the onset of the pandemic in mid-March, the company waived delivery fees at its more than 100,000 independent restaurants and launched targeted marketing campaigns to promote delivery. In April, Uber added the opportunity for consumers to contribute to their favorite local restaurants from the app at checkout.

Its delivery peers have also pitched in to help restaurants throughout the past year. Grubhub teamed up with the Restaurant Strong Fund in November to launch a Restaurant Winterization Grant, providing $10,000 to eligible independents. The program’s support came from the Grubhub Community Relief Fund, created in March to support organizations helping restaurants impacted by COVID-19. Grubhub is also offering free delivery in Chicago and New York through its subscription program through mid-March.

Meanwhile, DoorDash just expanded its $200 million Main Street Strong Program, increasing its grant program to $10 million to cover operating costs like rent, payroll, winterization efforts and more.

These lifeline campaigns come as competition in the delivery space intensifies between Uber Eats/Postmates, Grubhub and DoorDash. According to Second Measure, DoorDash continues to maintain the most market share, with 52%, followed by Uber Eats/Postmates (combined 29%) and Grubhub with 18%.

The campaigns could provide an advantage amid such competition and also create goodwill, a necessity in an environment in which criticism against delivery companies and their high commission fees still very much exists. They also illustrate the co-dependent relationship between restaurants and those delivery companies, a co-dependency has grown significantly throughout the past year. New data from the NPD Group shows delivery ended the year with a triple-digit gain of 137% over 2019.