scorecardHow Uber's latest update could pose a major threat to GrubHub
  1. Home
  2. tech
  3. How Uber's latest update could pose a major threat to GrubHub

How Uber's latest update could pose a major threat to GrubHub

How Uber's latest update could pose a major threat to GrubHub
Tech2 min read

A new update to Uber's app completely changes the way it looks, and puts a huge emphasis on food delivery.

UberEATS, Uber's food delivery function, used to be buried at the bottom of the app, alongside all of Uber's other services, like UberX, UberBLACK, and its courier service, UberRUSH:


But Uber is taking UberEATS seriously - it launched UberEATS in Los Angeles last year and has since expanded those services to New York City, Toronto, Austin, Chicago, and Barcelona. In each of its participating cities, Uber partners with a couple restaurants a day to offer meals to its customers, which the company delivers via courier within just a few minutes.

Uber's job listings page indicates that the company is making moves to expand food delivery services into more metropolitcan areas, including Miami, Nashville, San Diego, Philadelphia, Phoenix, Dallas, Seattle, and Houston.

And now, Uber is starting to emphasize food delivery just as much as its regular ride-hailing services.

Now when you open Uber's app, you'll be shown two options at the top that you can toggle back and forth between: a car-hailing option, which encompasses UberT, UberX, UberBLACK, UberPool, and, interestingly, UberRush, along with a food delivery option. (It's important to note that Uber appears to still be rolling out this update, as some users are already seeing it while others aren't.)

Click on the food delivery option if you're in one of Uber's markets where it serves food, and you'll be shown the day's menu.



Uber's emphasis on food delivery not only marks food delivery as Uber's second major category, analysts at Cowen said in a note Monday, but it could also pose a huge challenge to food delivery stalwart GrubHub Seamless.

UberEATS is only available in a handful of cities right now, Cowen's analysts say, though they expect UberEATS will become a major part of Uber's services. Alongside other food delivery on demand startups like Munchery, Caviar, and DoorDash, UberEATS could take advantage of GrubHub Seamlesss's slowing growth.

In Q4 2014, GrubHub's order growth was at 33 percent; by Q2 2015, this slowed to 25 percent. Cowen's analysts say that UberEATS - along with a bunch of competitors in the food delivery startup space - could capture 50 percent of the food delivery industry's growth in the 2015 fiscal year. This year alone, food delivery startups (not counting Uber) have raised a collective $500 million.

Though UberEATS is a feature available inside of Uber's main app, the analysts add, they predict that Uber's food delivery services could be spun off into a standalone app in the future.

NOW WATCH: 2 texting tricks you didn't know you could do on your iPhone