As Uber is facing a lot of regulatory obstacles in London, Tokyo, Seoul, and other cities in the world, they are now actively expanding their business via food delivery. How come this happens?
Uber is now generating 10% of its revenue via UberEats. And this is a small number. By the report of FT, the whole US restaurant market size was US$221Billion. And the take away was 32% of that. And the online ratio was 5% of that. And GrubHub takes 51% and that is now US$1.8 Billion.
As mobile and online have been eating all the areas of the world, there are a a lot of opportunities in this market. As O2O platforms like AirBnb or Uber are facing a big challenge from legacy business models, this food delivery has less or no interference compared with the legacy delivery model.
As this is the platform business itself, the profit rate is over 15%. According to GrubHub’s annual report, the company generated US$650 million revenue and its net income was US$100 Million. As this company is now have 0.8% of total US restaurant market, the opportunity is huge to grow.
That is why Facebook recently started food service order application and Amazon is expanding its business to this field. A lot of opportunity to disrupt this market.