Delivery service Uber Eats no longer has exclusive rights to McDonald’s deliveries in the U.K., according to CNN Business. The company now faces competition from a larger company, called Just Eat, which recently announced that it will partner with McDonald’s for delivery in the country.
Uber Eats has faced numerous struggles in Britain, and this adds to the list. Uber’s ride-hailing business took a blow when its license to operate in London was pulled. While the service continues pending an appeal, the loss of London would greatly damage Uber, as it’s one of five cities that make up about 25 percent of Uber’s U.K. bookings, according to 2018 figures.
The delivery service does about 30 million orders in the U.K. annually. McDonald’s makes up about half of that, according to Joseph Barnet-Lamb, an analyst at Credit Suisse. "Without that exclusivity, orders could be under pressure in 2020," he said.
McDonald's U.K. CEO Paul Pomroy said that the partnership with Uber Eats was very successful, adding that "we are delighted that we have agreed to partner with Just Eat as an additional delivery provider in 2020."
Uber is expected to post a loss of about $2.9 billion for the year, and is under much pressure to become profitable in the future. In addition, the company is leaving markets in which it is not doing well, such as India.
In the U.K., Just Eat is the biggest player in the game, processing 123 million orders in 2018. The Just Eat partnership isn’t expected to bring a windfall, due to low commission rates and low order values, but it could potentially persuade people to sign up for the service.
"This is all part of Just Eat taking back control of the competitive landscape," said Barnet-Lamb. "It's going to be interesting to see what Uber does next."