UberEATS, the food delivery branch of the ridesharing company lately embroiled in a series of scandals culminating in the ouster of its CEO, is on track to post more than $3 billion in gross sales by the year’s end, The Financial Times reports.
This comes at a time when Uber has faced intense scrutiny for several corporate crises.
Introduced in 2014 alongside a handful of other experimental services, UberEATS operates worldwide in 29 countries. The $3 billion gross sales figure is indicative of how rapidly the ridesharing company’s food delivery division has grown.
With 2 million drivers worldwide, Uber has access to a delivery infrastructure unavailable to competitors, with any given driver available to transport food or passengers in cities serviced by UberEATS. The firm is reaping the benefits of its built-in delivery fleet, with UberEATS orders comprising 8 to 10 percent of total ride bookings.
“At a certain density, you are able to offer products and services that are very hard for anyone else to replicate,” said Rohit Kulkarni, managing director at SharesPost, referring to the scale of Uber’s ridesharing infrastructure.
The bills for UberEATS orders also tend to be larger than those for standard Uber bookings, as clients pay for their food in addition to its transportation.
Like other retail delivery services, UberEATS faces the prospect of low margins and remains unprofitable in most of the regions it services, reports the Financial Times. Additionally, Uber has stiff competition in the online delivery marketplace, both from established players like Grubhub and from upstarts like Amazon, who launched its Amazon Restaurants service two years ago, and Facebook, who announced news of the integration of an “order food” function in its primary app this week.
Uber confirmed that, as of July, UberEATS boasted positive margins in just a quarter of the cities where the service is available.
Ridesharing still accounts for the majority of Uber’s value, but food delivery is growing more quickly than the company’s core business.