Here's why Uber isn't worried about the planned merger between Takeaway.com and Just Eat
- Takeaway.com and Just Eat have agreed to merge in a bid to create a global food-delivery champion.
- Uber Eats won't be too worried, given its greater scale and reach, faster growth, and larger cash pile.
- A bigger threat could be Deliveroo, which has raised over $1.5 billion from high-profile investors including Amazon.
- Watch Takeaway.com, Just Eat, and Uber trade live.
Combined orders at Netherlands-based Takeaway.com and UK-based Just Eat rose by about a third to 355 million in 2018, representing 7.3 billion euros ($8.2 billion) in gross bookings. The pair's cut of that amounted to roughly $1.2 billion in revenue, according to their full-year earnings.
Uber doesn't disclose the number of Uber Eats orders it processes. However, based on the representative order size of $18 shown in its IPO filing, the company's $7.9 billion in gross bookings suggest it received around 439 million orders last year.
Uber Eats appears to be roughly the same size as Takeaway.com and Just Eat combined, although it's growing much faster. Uber Eats revenue surged nearly 150% to almost $1.5 billion last year, although that falls to $759 million if you subtract driver referrals and certain incentives. Its revenue grew by 89% to $536 million in the first quarter, while Just Eat's revenue rose 28% and Takeaway.com's revenue jumped 70%, boosted by its acquisition of Delivery Hero in Germany.
The division's key advantage is its scale. Uber Eats has partnered with more than 220,000 restaurants in over 50 cities across the 63 countries in which Uber operates. Together, Takeaway.com and Just Eat have 155,000 restaurant partners in 23 countries. The pair are also dependent on a couple of key territories: the Netherlands and Germany accounted for 78% of Takeaway.com's gross revenue in the first half of this year, while the UK and Canada generated 73% of Just Eat's first-half revenue.
Uber's deep pockets also give it a leg up in the food-delivery race. Takeaway.com reported a pre-tax loss of 23 million euros ($25.7 million) in the first half, while Just Eat recorded a pre-tax profit of less than £1 million ($1.2 million), so they're hardly raking in profits.
Uber Eats is almost certainly losing money, but Uber as a whole has more than $5.7 billion in unrestricted cash on its balance sheet. Just Eat and Takeaway.com have a combined $278 million, a large chunk of which they owe to restaurant partners.
Given Uber Eats' greater scale and reach, faster growth, and larger cash pile, it shouldn't be too concerned by Just Eat and Takeaway.com joining forces. A greater threat could be Deliveroo, which has raised over $1.5 billion in financing from Amazon and other high-profile investors.
Deliveroo operates at a similar scale to Just Eat and Takeaway.com - it worked with about 80,000 restaurants in 14 countries, and earned £277 million ($337 million) in revenue in 2017. However, Amazon's global presence, logistics and delivery expertise, cloud-computing prowess, and financial clout promise to supercharge Deliveroo's growth and make it a formidable rival going forward.
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