In eight countries, it appears that the parent company has decided Uber Eats fails to deliver the desired market clout. As a result, Uber is dropping its online food delivery business in the Czech Republic, Egypt, Honduras, Romania, Saudi Arabia, Ukraine and Uruguay.
The company said its goal was to become one of the top two operators in those countries, according to Reuters, but it does not see that happening. Uber will also “transition operations” to Careem in the United Arab Emirates. Careem is an Uber subsidiary focused primarily on the Middle East.
“This continues our strategy of focusing our energy and resources on our top Eats markets around the world,” the company said, adding that the moves will not affect its ridesharing business.
Uber said the shutdowns will take place by June 4, affecting “50 full-time roles.” The discontinued and transitioned operations only represent 1 percent of Uber Eats’ “gross bookings” in the first quarter of 2020, along with 4 percent of its “adjusted core earnings losses.”
The global pandemic has not turned online food ordering into the hot business that might have been expected. That’s despite the social distancing regulations that have shuttered many restaurants across the U.S. and other countries.
As reported by PYMNTS, restaurant chains and suppliers have closed, while many have shifted their online food shopping activities toward buying groceries and using their own kitchens.
In fact, Uber Eats and Just Eat saw declines in their average daily users of between 2 percent and 23 percent in March, based on downloads and use of smartphone apps.
Grubhub said the sales declines it has experienced have not been distributed evenly. For example, New York City has seen residents move out of the area and restaurants close due to pandemic panic. In contrast, business in Seattle is more solid, as the West Coast city is further along in dealing with COVID-19, the company said.
According to data from PYMNTS, the aggregators have not gained much traction. With two surveys – one done on March 17 and the other on March 27 – PYMNTS found that the percentage of people using aggregators grew somewhat, from 40.9 percent to 41.9 percent.