By Nancy Dahlbergemail@example.com
Craving a Maple Bacon doughnut about now? UberEATS wants to speed it over to you, and maybe some for your office mates, too.
As part of its move beyond transportation, Uber, the fast-growing ride-sharing service, launched UberEATS in the Miami area on Tuesday, joining a full menu of on-demand restaurant delivery options in South Florida. Uber says it has about 100 restaurants signed on so far; the company initiated the service in the densely populated eastern corridor, from Brickell through Hollywood, with plans to expand Coral Gables, South Miami and other areas in time.
“What we’ve seen is that South Florida has really embraced Uber ... so over the last few months we thought, let’s further invest in the community to bring UberEATS down here,” said Kasra Moshkani, Uber’s general manager for South Florida.
Consumers can scroll menus and place orders via a free UberEATS app, available on Apple and Android. One does not have to be an app-carrying Uber member to use UberEATS, said Moshkani. Would-be customers can enter their addresses at ubereats.com/miami to determine if delivery is available.
Menu prices are the same as in the restaurants. Deliveries will be free for at least the next few weeks, he said; they will then rise to $4.99. As with its ride-sharing parent company, tips are not expected with UberEATS.
The company will tap its network of about 10,000 area Uber drivers to pick up and drop off food orders between 8 a.m. and midnight any day. Along with The Salty Donut and its famous Maple Bacon indulgence, restaurants include Wynwood Kitchen & Bar, Sushi Maki, Sliders, the Daily Creative, Ms. Cheezious, DIRT, Jar + Fork, Roasters N Toasters, The Rice House of Kabob, Salsa Fiesta and SoCalTaco.
In addition to drivers, Uber has a membership network of thousands of consumers in South Florida (Uber will not disclose membership numbers) to which it can market the service. It goes up against the mighty Amazon, which entered Miami-Dade County last month with its Amazon Restaurants app, offering free one-hour deliveries for Amazon Prime customers.
The two giants also compete with Postmates and GrubHub, part of the wave of on-demand services sweeping South Florida in the past two years, led by the ride-sharing services. These companies are joined delivery services for groceries and meal ingrediants. The battle for users has already had at least one casualty: San Francisco-based Caviar, a restaurant delivery service owned by Square, operated for about a year in Miami but quietly pulled out in the wake of Amazon’s and UberEATS’ arrival. It still operates in a number of other cities.
What’s driving this trend beyond the traditional pizza delivery: millennials’ preferences for more varied and healthier food options delivered conveniently via a few clicks on an app. The urbanization of downtowns — like Miami’s — swarming with young professionals also provides the density to potentially make these business models work.
Consider this: Restaurant delivery outside of pizza is growing strongly, up by 26 percent since 2012, while traditional quick-service pizza delivery overall is down 5 percent, according to new NPD Group food-service market research. While non-pizza food-service delivery is still a relatively small segment, NPD expects rapid growth with players like UberEATS and Amazon now in the mix. NPD forecasts that restaurant delivery will continue to outpace overall restaurant industry traffic growth over the next decade.
Bonnie Riggs, restaurant industry analyst with NPD Group, sees a big growth opportunity ahead for restaurants, as these tech-enabled restaurant-delivery services begin to move into smaller cities and suburbs. “Consumers are looking for convenient meal solutions beyond pizza and Chinese food and anybody that can address that need in a timely, price-related value situation can drive business,” Riggs said. “But it’s critical that these third-party providers deliver the food in a fast, efficient manner so it stays hot and fresh. That is going to be key.”
Miami marks the 19th U.S. city where UberEATS is offered and signals Uber’s strategy to use its on-demand logistics engine in industries beyond transportation. The company, which recently was legalized in Miami-Dade County after a long regulatory battle, was the eighth market to get UberPOOL, the car-pooling service it launched in Miami late last year, Moshkani said.
The company also offers UberRUSH, a package delivery service, in some markets.
“In all these areas, we are constantly experimenting and testing reception,” said Moshkani, who said that South Florida is one of Uber’s fastest growing markets. “UberEATS is our next bet on this market. Everyone’s got to eat and the food space is something this community is really proud of in its culture. That’s why we are making the investment here.”
Still, the move come as some analysts and venture capitalists are concerned the food delivery sector is overheating. Kevin Kopelman, an analyst at Cowen & Co. who follows the publicly traded GrubHub, warned in a recent research note that UberEATS could become a threat to GrubHub, citing Uber's 19 million U.S. users and 400,000 drivers.
He also said the cost of UberEATS is more digestible: A $25 meal from UberEATS comes to $30 with the delivery fee, and a comparable order could run as high as $38 from Postmates, $37 from DoorDash, $36 from Caviar and $33 from GrubHub, he said.
Though venture capital investment in the young food-tech sector hit a record $5.7 billion last year, investors have pulled back in 2016. If the current rate of investment holds, the sector will attract about half the investment as last year, according to data analysis firm CB Insights’ research.
Matthew Wong, a data analyst at CB Insights, expects “a more scrutinized funding environment” as well as market consolidation, he has said in a Miami Herald interview and other media reports. “Food is such a big segment of consumer spending, and we're going to see companies emerge as big players here,” Wong said in a recent Los Angeles Times report. “Some companies in the space might lose, but the space as a whole won't.”
Andy Rodriguez, co-owner of the Salty Donut, is betting on UberEATS. He said he likes that UberEATS platform doesn’t have the same restaurants as everyone else. He also praised the customer service and attention to detail he has received from the Uber team.
For that Maple Bacon delight or any other Salty Donut hand-crafted creation, you will have to wait a few days. The gourmet doughnuts will be available Thursday through Sunday on the app, coinciding with the hours of its Wynwood pop-up store and a new pop-up location at the Confidante Hotel in Miami Beach, Rodriguez said — “while supplies last.”
Nancy Dahlberg: @ndahlberg