Uber to expand UberEats food delivery to 100 new cities
Uber is increasing investment in food delivery this year with plans to launch its UberEats takeaway app in 100 new cities across Europe, the Middle East and Africa after generating a profit in a quarter of the locations where it operates.
Jason Droege, head of logistics at the San Francisco-based company, told the Financial Times in an interview that UberEats had been “more successful than we thought”. It will play a central role in Uber’s expansion outside of transport ahead of an expected initial public offering next year.
Uber has already rolled out UberEats in more than 200 cities. It plans to open the service in Ireland, Egypt, Kenya, Ukraine, Romania and the Czech Republic, in addition to more than 40 new cities in the UK and 35 new cities in France. It is aiming at a bigger slice of the $28bn food delivery market in Europe, the Middle East and Africa.
Mr Droege declined to specify how much the company would invest to expand the service.
The plans come amid a push to improve financial discipline at Uber ahead of any IPO. Dara Khosrowshahi, chief executive since August, is also looking to refocus on core markets as he tries to clean up a tarnished image.
Uber is close to signing a deal that would see it effectively pull back in south-east Asia in exchange for a stake of more than 20 per cent in Grab, its Singapore-based rival.
SoftBank, the Japanese technology group that became Uber’s biggest investor late last year, told the Financial Times in January said that the company should revamp UberEats.
Mr Droege said Mr Khosrowshahi was “a big fan of the [UberEats] business,” which he added had “viable unit economics”.
UberEats was profitable in 45 of the 200 cities where it operated in the year to December 31, compared with just three out of 50 cities the previous year, Mr Droege said. At the end of last year, it generated about 10 per cent of the company’s overall gross revenue, or $1.1bn in the fourth quarter.
The proposed expansion comes as competition in the sector intensifies, with rivals including London-based Deliveroo saying last month that it would hire 250 tech employees to bolster its own global ambitions. The company already faces tough competition in the US, where DoorDash earlier this month raised $535m from a group led by SoftBank.