Uber Eats has singularly handled McDonald’s delivery since 2017 in about 64 percent of the chain’s stores in the U.S., and delivery has ballooned into a $3 billion business.
However, Chris Kempczinski, McDonald’s U.S. head, said that it still only accounts for about 2 to 3 percent of its total business.
Before Uber went public, there was news that McDonald’s was trying to get Uber to lower commission fees and end the exclusive partnership. Restaurants reportedly pay around 15 to 30 percent to Uber Eats for delivery.
Uber said it charges some chain restaurants a lower fee to be able to work with them. A number of franchisees took umbrage with the fees and formed the National Owners Association last year to push back against corporate decisions.
The move to partner with DoorDash will begin on July 29 in Houston, Texas, in over 200 restaurants.
“Building on the success of McDelivery in the U.S., we’re excited to make McDelivery accessible to customers on DoorDash, which is available in all 50 states and reaches 80 percent of Americans, making it even more convenient for our customers to enjoy their favorite McDonald’s menu items on their terms,” Kempczinksi said.
The McDonald’s menu will be available on DoorDash’s subscription service, which gives members unlimited free delivery on orders that are $12 or more. On the news, Uber shares dipped less than 1 percent during afternoon trading on Tuesday. Shares in rival delivery service GrubHub dropped 2 percent. Another delivery company, Waitr Holdings Inc., also saw a decrease in its value, and was down 5.57 percent.
Both DoorDash and McDonald’s said they expect the partnership to be profitable for both enterprises.
“We are excited to make that entire equation work,” DoorDash Chief Operating Officer Christopher Payne said, according to the The Wall Street Journal.