Online transportation network Uber is moving into food delivery in
Singapore.
The New Paper understands that restaurants here have already been
approached by the service, which is called UberEats.
When contacted, Uber would say only that they are "pleased that
word is sure spreading fast about UberEats" and that "details will
be announced soon".
It will be the latest addition to a market that already has
well-known food delivery services Foodpanda and Deliveroo. (See
report on right.)
TNP understands that UberEats may be launched within the next month
and that at least 10 food and beverage outlets have been
approached, some as early as a month ago.
Two said they have accepted a deal, one of whom said UberEats had
offered it an "exclusive" contract. Of the others TNP spoke to, one
has rejected the deal and the rest are considering their
offers.
UberEats operates in 13 cities globally, including Los Angeles,
Paris and Melbourne.
First launched in 2014 as UberFresh, it was an option integrated
with the Uber transport app before Uber launched its standalone
UberEats app in March last year in five cities. Other cities are
"just around the corner".
But last month, UberEats New York killed its "instant" option,
which promised to deliver preselected meals in 10 minutes, as it
had wanted to "narrow its focus".
On UberEats' website for delivery crew sign-ups, an option for
Singapore in the drop-down location field already exists.
Transportation methods differ in each city. London, for example,
allows scooters and bicycles to be used, but driving is the only
transportation method available to delivery crew here.
Foodpanda's delivery charges vary by restaurant while Deliveroo
charges a $3 flat delivery charge for orders above $25, and another
$5 surcharge for orders below $25.
INTERNATIONAL RATES
Although specific details of UberEats Singapore are unknown,
UberEats charges a flat delivery fee of about US$5 (S$6.80) in US
cities and A$5 (S$5) in Melbourne, Australia.
In the US, after a customer places an order, UberEats sends it to
the restaurant and gives the customer an estimated delivery
time.
When the order is almost ready, Uber locates a driver in the
vicinity of the restaurant and asks if he would like to deliver the
item.
If there are multiple orders from the same place at around the same
time, the orders will be combined in a single trip so the driver
can earn multiple delivery fees.
The delivery fee is shared between Uber and the driver. Uber
charges the restaurant a fee for every order placed through
UberEats.
While there is no data on how much the Singapore food delivery
market is worth, experts agree it is growing.
In March, Foodpanda's managing director Emma Heap revealed that
last year saw a 400 per cent growth in revenue over the year
before, reported The Straits Times.
Four months after it launched here in November, London-based
start-up Deliveroo saw its fleet grow from five delivery riders to
550.
Other players in the food delivery market include hawker.today,
which delivers hawker food, and The Foodist, which curates tasting
boxes that start from $15.
"The food delivery industry is growing as consumers today are
time-stressed and opt for convenience, from dining to online
shopping," said Adjunct Associate Professor Lynda Wee from Nanyang
Technological University's Nanyang Business School.
On whether UberEats can compete with existing competitors, Dr Wee
said: "If UberEats is able to meet diners' demands in different and
better ways, why not?
"Take the example of eyewear retail shops. There may be many
optical shops, but this does not mean that the market is saturated.
If it is saturated, how come (optical shop) Owndays can grow?"
WARNING
But some warn against the sustainability of such services.
Associate Professor Ang Swee Hoon from National University of
Singapore Business School said food delivery services must receive
large orders to enjoy economies of scale.
She added: "The convenience that food delivery services offer have
to far outweigh the 'inconvenience' of going out to buy food
yourself.
"This may be difficult given that foodcourts are so accessible
nowadays and are probably less expensive than food delivery."
Experts are also divided on whether the "Uber brand" will have an
effect on UberEats.
Food and private car-hire are two different products altogether and
consumers will not necessarily flock to UberEats just because Uber
is well-known, said Prof Ang.
She said that UberEats has to differentiate itself from its
competitors to break through the competitive clutter.
But Dr Wee said that "brand recognition" may help UberEats.
She said: "If we (consumers) have a good experience with Uber, we
will transfer the positive feelings.
"Uber is perceived as innovative by being a game changer in the
taxi business. Hence, we expect the same for UberEats."
TNP