How Does UberEats Make Money? UberEats Business Model In A Nutshell—–9 Point
This article is about how does UberEats functions and ubereats business moddel? Let’s share a story of a renowned platform of UberEat to popup the secret of UberEats’ success in the shortest possible period. As a layman, we think that Uber Eats has been minting money through day & night food deliveries, but the fact is on the other way round. Why? Because Ubereats is not only one, but it is three in 1. Therefore,we can conclude that UberEats business model is of tripartite market place comprising of the following:
Three of the parties are considered the main characters of Uber Eats Platform such as; UberEats( itself) gets commission from Restaurants on the orders, Customers pay the small delivery charges, and sometimes cancellation fee( if any) while the Drivers earn their livelihood through deliveries.
UberEats has a sound background as it is the world’s largest ride-share company that has been in operation since 2014 and today the Uber Eats is just 5 years’ old, but looks like a university girl. UberEats has been getting more popularity in most of the countries of the world due to fast & rush deliveries of food.
So, let us read & learn through this post as to why Uber is investing a lot on the UberEats business model including its value proposition, operational components and also vision of the Uber Eats. Our main topic is “how does Uber Eats make money? Uber Business Model Business In Nutshell”
1. A Tripartite Marketplace Business
As discussed earlier, UberEats business model is a three-sided marketplace comprising of a driver, a restaurant owner and a customer. Therefore, whatever the profit is earned during a particular period, it is divided into 3 parties in the agreed ratios.
2. A six-point value proposition:
3. How Does ‘UberEats’ Makes Money? The UberEats Business Model
Following manner will describe how Uber eats makes money:
4. It is also important to know that how much UberEats pays for their delivery partners or drivers.
Well! It is divided into three segments which are pickup fee, delivery fee and per mile fee also referred to as mileage fee. However, it may vary from one region to the other.
A customer can tip the delivery partners if they want to and 100% of this tip would be allocated to the delivery partner only.
5. UberEats’ Cost-Saving Factors:
UberEats businness modell has been proved a cost effective & more efficient than that of its competitors regardless of its unique three-sided marketplace business model
6. Lesser Customer Acquisition Cost (CAC) and Shared Marketing Expenses: All of the marketing and advertising expense incurred by Uber Eats is comparatively less since it’s getting most of its users through cross-promotion on the Uber App.
7. Shared Network of Drivers & Riders: Shared network makes fast, easy & free from any trouble
8. Savings on Logistics Costs: Due to the route policy, savings in the running costs of Uber Eats have been noticed. It is called the pool system in which the delivery shall be entrusted to that Driver who will be on the route to save unnecessary cost of the logistics.
Approximately, this is how the unit economics should reflect as shown in the table below:
|Amount paid by You||Amount Received by the concerned Restaurant||Delivery Charges||Net revenue for Uber Eats|
|$50+5= $55||$50- 30% commission on order= $ 35||Pickup fee + Delivery fee+ charges/ mile= $4+$2+($2×3)=$12||=( $55-35)-$12= $8|
9. The Vision of Uber Eats
Uber has been covering 50% of the US population at present and likely to cover 70% or more by the end of 2019. Uber Eats holds 27.9% of the revenue share of all top online food delivery services in the USA and is approximately valued at 20 billion USD. Uber Eats has been the most modern ecommerce in the world and it has been striving hard to cater to the needs of food to the millions of people in different parts of the World including USA, UK, India and Australia despite the fact that online food ordering & delivery platforms have a great menace of competition. So, think about it, how the Uber Eats may have made a place in the Ecommerce world.
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