It’s no secret that third-party food delivery services are all the rage today. Since the pandemic, the number of third-party food delivery orders has skyrocketed and even though most restaurants are open for business again, many people still take advantage of services like Uber Eats, but is it worth it?
If you own a restaurant, you probably assume signing up for a food delivery service is smart. Why wouldn’t you want to increase your chance of sales, right? This is especially true if your restaurant doesn’t already offer delivery, but there are some downsides you might want to consider too.
Here’s what you should know.
The Pros of Using Uber Eats at your Restaurant
There are many benefits of using Uber Eats at your restaurant. Understanding them and how they might help your business is important.
Easy Marketing
With Uber Eats, you automatically can take advantage of their wide reach. Everyone knows and trusts Uber, so it makes sense that many people would reach out to Uber Eats before any other food delivery service.
You can take advantage of the wider reach your restaurant would have without putting in any money or effort toward marketing.
You can Offer Delivery
If you’ve never had the capacity to offer delivery, Uber Eats makes it possible without hiring more staff or worrying about insurance policies. Uber Eats handles the logistics of delivering the food – all you have to do is provide the food for them to deliver which means you might increase your sales.
More Exposure
When customers download and open the Uber Eats app, the app uses their location to suggest local restaurants. You might find that you get new customers because of this. Whether it’s customers visiting from out of town than didn’t know about your restaurant or even locals that hadn’t seen your marketing yet, it may increase your chance of securing new business.
The Cons of Using Uber Eats at your Restaurant
Like any service, there are downsides to using Uber Eats at your restaurant. Knowing the downsides can help you determine if it’s the right service for you.
You’re at the Mercy of Uber Eats Drivers
You work hard to create a reputation for your restaurant, and it can be gone in an instant if you get a bad Uber Eats driver. Since you aren’t in control of who delivers the food, you risk your customers receiving cold food, not receiving their order at all, or dealing with a rude driver that makes the customers not want to order from you again.
The Costs are High
This is the biggest downside of using Uber Eats – the fees. Of course, you’d expect to pay a fee to the company for offering such a convenient service, however, the Uber Eats fees are steep. They charge 30% of every item purchased. For example, if you have a sandwich listed for $12, Uber Eats automatically takes $3.60 from that fee.
If your restaurant already has a low profit margin, it could be impossible to afford the cost of using Uber Eats.
You Cannot Raise Prices for Uber Eats Orders
As a part of your agreement with Uber Eats, you cannot raise your prices to cover the cost of Uber Eats. This means you must be able to take off 30% right off the bat for Uber Eats, plus your other costs.
What to Think about Before Signing up with Uber Eats
Aside from the pros and cons of Uber Eats, it’s important to understand what you should consider if you decide it’s right for you.
What’s your Goal?
Using Uber Eats obviously gives you a wider reach so you might make more sales, but what is your ultimate goal?
Remember, when you hand off your food to Uber Eats drivers, you are no longer in control. You don’t know who’s delivering the food, how they are handling it, and how they are treating your customers. Your brand and reputation are on the line, so think about your ultimate goal and compare it to the risk of using Uber Eats.
Is your Profit Margin High Enough?
Your profit margin may not be high enough to use Uber Eats. This is the problem many restaurants experience. Because Uber Eats has the highest fees in the industry, it’s meant mostly for those restaurants with a high profit margin that can eat the 30% fees Uber Eats charges.
Don’t Use it for Marketing Intel
While Uber Eats is a great way to get your brand out there and possibly bring you more orders, you won’t have access to any of the marketing information yourself, so it’s hard to keep track or run reports to determine what your customers like and dislike.
Since Uber Eats captures the customer’s information, they can use it for their own intel, helping them ramp up their business and possibly even push customers to other businesses – not yours.
Can your Food Withstand Delivery?
If you didn’t deliver food before, there could have been a reason. Although Uber Eats is popular and a great way to get your food out to more people, if your food can’t withstand delivery (it will be delivered cold, messy, or not how it was intended), you might want to find other ways to build your business.
Final Thoughts
Is Uber Eats for you?
It depends. There isn’t a one-size-fits-all answer to the question. However, profit margins can help you decide rather quickly if it’s right for your business or not. Profits are the key to staying in business and if using a third-party like Uber Eats will put you over the edge, you might be better off looking for other ways to grow your brand that don’t involve using a third-party delivery service.