Uber Is Disrupting Again, But This Time, It's The Restaurant Industry

Derick David

https://img.particlenews.com/image.php?url=3qFGxW_0Y1zJZG800

Image: Mark Castellani/Medium

Uber’s flagship service, the ride-hailing platform, which is infamous for disrupting the taxi business and accumulating a number of controversies and speculation in the past several years has made an indeed, impeccable impact on the planet. As an old saying goes, if you’re disrupting something, you’re attracting a lot of trouble. If Uber did it for the taxi industry and it may do as well for the food industry, considering all of Uber’s resources, reach, and technology. But how can Uber exactly achieve this? Let’s take a look.

Uber’s Transition To Food-Delivery

Uber has acquired a number of Food-delivery startups in the past, which made Uber Eats what it is today. More recently, Uber has made an offer to acquire Grubhub, a competitor in which occupies around 30 percent of the market share. Uber operates its own food delivery service, Uber Eats, which is the rival of Grubhub. An October 2019 report had Uber Eats with roughly 20 percent of the food-delivery app space, while Grubhub had 30 percent, as mentioned above. Both fell behind DoorDash, which controls 35 percent of the market and is the fastest-growing of the three. Now, Buying Grubhub could launch Uber from third place to first and give the company a massive advantage over DoorDash and other platforms.

Then, all of sudden, a Dutch food-delivery startup, Just Eat Takeaway, is rumored to be in Talks to Acquire Grubhub, which wipes away the Uber deal off the table. Apparently, Uber itself has lost the deal. Now, we don’t the whole story here, Uber could still be in talks in GrubHub, as far as we know. However, the whole message here is Uber putting more of its resources and its time into the food-delivery business. Uber’s stint with GrubHub doesn’t stop there, if they can’t get GrubHub, they might try someone else, like DoorDash, or just buy Just Eat! They want to dominate the food space and they have the money to do so.

From Taxi To Food Industry

Uber is long due to revenue and Uber Eats has shown a more stable cash flow and potential profits than its ride-hailing side. This can be a reason why Uber has been putting more resources into the Uber Eats.

On a report in 2019, Uber experienced its lowest-ever quarterly revenue growth — but Uber Eats saw a big jump.

Uber’s total adjusted net revenue grew 12% year-over-year (YoY) to $2.8 billion in Q2 2019, in part dragged down by the company’s core ride-hailing segment — that segment’s adjusted net revenue grew just 4% YoY to $2.3 billion in Q2 2019.

But one bright spot was high revenue growth in Uber Eats, which grew 53% YoY and accounted for $337 million in adjusted net revenue, a record high for the segment. Uber Eats accounted for almost 12% of Uber’s total adjusted net revenue in Q2 2019, up from just over 8% in Q2 2018.

The growing food delivery segment likely represents a stronger long-term revenue opportunity for the company.

A Founder’s New Venture

CloudKitchens’ is a super-secretive venture founded and funded by Travis Kalanick in 2016, that utilizes shared kitchen spaces designed for delivery-only restaurants. The idea is to allow multiple food-operators to cook food all in one place. Imagine a number of restaurant owners and their chefs all one location, ranging from Asian, Mexican, European, and Brazilian cuisine. The bigger picture here is to let you grow your business in chief locations with minimal investment, making the whole food-delivery process cost-efficient.

A food-operator can operate more cheaply and earns more per hour. It eliminates the whole creation of a fast-food and restaurant hassle. You don’t worry about the real estate, CloudKitchens does that for you. As a food-operator, you only focus on cooking the food and serving it to your customers.

By more definition, according to Crunchbase,

CloudKitchens is a real estate company that provides smart kitchens for delivery-only restaurants. They provide infrastructure and software that enables food operators to open delivery-only locations with minimal capital expenditure and time. It was founded in 2016 and is headquartered in Los Angeles, California, United States.

Travis has been building a whole new infrastructure for food-delivery and redefining how the restaurant businesses work. Kalanick’s plan seems to eliminate the pain of delivering to each fast food or restaurant for every order by actually making one centralized location that hosts multiple food-operators at the same time. In this way, the food-delivery drivers drive only into one location instead of many locations, saving them time, money, and energy.

Additionally, CloudKitchen's brand design is also very similar to Uber’s brand design. Could this be a subtle sign of mockery to Uber?

Amidst COVID-19, CloudKitchens has redefined how restaurants worked.
See more about the story.

CloudKitchens Nature To Disrupt

https://img.particlenews.com/image.php?url=3EIcqv_0Y1zJZG800Image Credit By Data Labs

A customer has more food choices and gets the food faster. A food-operator can operate more cheaply and earns more per hour. It eliminates the whole creation of a fast-food and restaurant hassle. You don’t worry about the real estate, CloudKitchens does that for you. As a food-operator, you only focus on cooking the food and serving it to your customers.

This idea can disrupt fast-foods and restaurants in the future.

A quote from TechCrunch published October of 2019.

To come from a world in which kitchen space is suddenly shareable, and that’s going to lead to a complete disruption of restaurants as we know them.

CloudKitchens whole business model is all about rendering the whole food-ordering faster, easier, and simpler to process. Perhaps, Kalanick knew the possibility of this idea and used it to compete with Uber Eats? Or He is using it so one day Uber might consider buying CloudKitchens, so then, Kalanick comes back to totally dominate the space? Let me know your thoughts.

Prodigal Son’s Return?

Remember when Steve Jobs founded NeXT Computer after he got fired from Apple. Then, he used the NeXT operating system as a bait for Apple's lack of functioning and foundational OS. A few years later, Apple then bought NeXT for 500 million dollars and Jobs came back to Apple.

Now, a possible scenario can be drawn out for Travis Kalanick.

Kalanick can use CloudKitchens’ smart kitchen infrastructure as bait to strengthen Uber Eats' advantage over competitors. Has Kalanick been preparing for this exact scenario for a long time? Will Uber buy CloudKitchens and Kalanick comes back to Uber as CEO?

If Uber does actually buy CloudKitchens and Travis comes back as CEO, CloudKitchens can make Uber Eats a more cost-efficient and more cost-effective food-delivery platform. Uber Eats can absorb CloudKitchens software, merge, and you have a whole new upgraded and reinvented food-delivery platform.

Does all of these fall in the hands of Kalanick? Is Kalanick the one that will ultimately save Uber’s reputation and Uber Eats’s strategic moves and start a Steve Job-Esque return and eventually, bring a set of new visionary innovations? We’ll find out.

Comments / 0

Published by

10x Top Writer on Entrepreneurship, Innovation, and Startups.

New York, NY
121 followers

More from Derick David

Comments / 0