The rise of Uber Eats comes following society's "quest for convenience". Photo / 123RF
The rise of Uber Eats comes following society's "quest for convenience". Photo / 123RF
Home delivery is now big business and Uber Eats has driven the demand.
Auckland University of Technology senior hospitality lecturer Lindsay Neill says the boom in the home delivery market — and Uber Eats' rise — comes following society's "quest for convenience".
"People are showing a display of conspicuous consumption,"Neill says. "Because we're working longer, even though we're reaping reward for that financially, we just don't have time to go home and cook dinner."
Prior to the food delivery boom, most people would stop by the local takeaway or supermarket after work to buy something like a hot chicken or heat-and-eat meal. These days people head straight home and pull up an app to order food for delivery.
Neill says Uber Eats has opened up the quick service restaurant market but contrary to critics, he does not believe it has disrupted the industry or the traditional way of operating.
"It's an extension of food-to-go from a restaurant ... another way that a business can increase its cash turnover by moving sideways — they've now got guests in the dining room, guests in the bar and now guests at home — it's opened up new possibilities."
"I see it as an advancement towards convenience and the convenience benefits the consumer," says Neill. "If more people are spending money at a restaurant or a fast food outlet, whether it be by their physical presence at the restaurant or getting on Uber, the cash register is still ringing. The goal of every business is to make a profit so here's another way it can reach more people and have a wider audience."
Neill says being on a third-party delivery platform is how businesses can not only grow their market share, but keep it, in this day and age.
But Don Meij, global chief executive of Domino's Pizza Enterprises, disagrees.
He believes such platforms are risky for a business — not to mention the hefty commission they take per order.
Don Meij, chief executive of Domino's Pizza Enterprises. Photo / Supplied
Meij started out as a Domino's delivery driver around 32 years ago. The pizza business, unlike many mainstream fast food brands, has its own fleet of drivers and has been delivering its food for close to 60 years.
He says third-party contracting is wasted productivity.
"The contract driver model is it is apparently cheaper. The reality is that isn't cheaper as it is not efficient," Meij says. "Being our own team members, we're able to own the situation and deliver faster.
"We have this whole workforce that we're culturally aligning in our business because if they're not delivering the pizzas, they are working in the store which is a much more meaningful job than sitting on the side of the street, not getting paid."
Meij says consumer habits have done a 180-degree turn in recent years.
"Pre this decade, most of delivery was in decline and so the way we grabbed our business was pick-up with carry-out specials and that was significant, but since digital, delivery has continued to grow for us," he says, adding the ASX company was going to invest in technology for the "internet of food" category.
"We saw delivery pivot probably in the momentum of online around five, six years ago and it's just continued to increase year on year ... People say, 'didn't you have it all to yourself' and therefore 'how are you going to continue to grow with so many entrants' — well, the market is growing so much."
Meij says the pizza business was continuing to innovate to make delivery more efficient, including with its 10-minute delivery model.
He says Domino's owning its own fleet as a competitive advantage, particularly in the future as the demand for delivery continues to grow.
A UBS report looking at the global delivery market forecasts 25 per cent of analogue food consumption will become digital in the next 10 years. Morgan Stanley and Goldman Sachs predicts it could be as much as 50 per cent.
Around 70 McDonald's of 170 New Zealand restaurants are on Uber Eats. Photo / Getty Images
Burger giant McDonald's signed on to Uber Eats several years ago, with around 70 of its 170 New Zealand restaurants using the platform.
The company began trialling delivery with its own fleet of drivers in several of its Auckland stores which McDonald's director of marketing Jo Mitchell says was the reason it decided to partner with Uber Eats.
"The trial proved out demand for delivery of McDonald's, and with the global partnership and Uber Eats' core competency in delivery, it made sense to roll out nationally with Uber Eats," she says.
Mitchell says convenience used to be the drive-thru and being open 24/7 but is now in the hands of home delivery.
Uber Eats New Zealand country manager Andy Bowie says since it began operating in Auckland two years ago an increasing number of restaurants have signed on.
It now operates in six cities with around 1500 eateries signed on.
Bowie says the San Francisco-based company had been overwhelmed by the uptake from Kiwis "who've truly embraced the app as a new way to get the food they love, delivered to their door".
