Uber sees its burgeoning food delivery service as a massive opportunity

Uber
  • Uber believes its Uber Eats app addresses a $US795 billion market.
  • So far, it believes it has only penetrated 1% of that market considering Gross Bookings for Uber Eats have reached $US7.9 billion in 2018.
  • The company says it views Uber Eats as being the largest meal delivery platform in the world outside of China.

Uber believes the food delivery program it launched more than three years ago addresses a $US795 billion market, the company revealed in the S-1 documents it filed on Thursday as part of its initial public offering.

Revenue from Uber Eats has also grown significantly, according to the filing. Uber Eats revenue was $US1.5 billion in 2018, representing an increase of 149% from the $US0.6 billion in revenue the food delivery service generated in 2017.

The company also said it views the serviceable addressable market for Uber Eats as being $US795 billion, which refers to the amount that consumers spent on home delivery, takeaway, and drive-through worldwide from restaurants, caf├ęs, bars in 2017. The company believes it’s only penetrated 1% of this $US795 billion market so far given that Uber Eats Gross Bookings reached $US7.9 billion in 2018.

Based on Gross Bookings, the company says it believes Uber Eats is the largest meal delivery platform in the world outside of China. Of the 91 million monthly active platform consumers on Uber’s platform, more than 15 million received a meal using Uber Eats in the December quarter. The company defines Gross Bookings, not to be confused with revenue, as the total dollar value ridesharing and new mobility rides, Uber Eats meal deliveries, and amounts paid by shippers for Uber Freight payments.

Uber believes it has an advantage in its scale, which it says enables it to offer faster delivery times than its competitors. The average delivery time for an Uber Eats order was approximately 30 minutes for the December quarter, the company said. Uber Eats operates on a network comprised of more than 220,000 restaurants in over 500 cities.

It’s not just the home delivery market that Uber is after. It says it believes that it can address a portion of the $US2 trillion eat-in market as more consumers opt to have meals from dine-in eateries delivered, and also says there’s room for Uber Eats to address a portion of spending on groceries too.

Ana Mahony, head of U.S. cities for Uber Eats, discussed the potential the service has to expand when describing how it’s recently grown in popularity within suburban areas.

“The demand that we’ve received from the suburbs over the last year and a half has been truly phenomenal,” she said in an interview with Business Insider. “It shows the power and potential to expand our business everywhere.”

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