Can Uber Eats overcome local competition in 22 new countries?

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Uber Eats Faces Significant Challenges in Expanding to 22 New Countries

Uber Eats is embarking on an ambitious global expansion, planning to enter at least 22 new countries beyond its current six operational markets. This move signifies a substantial escalation of its efforts in the meal delivery sector, aiming to leverage its existing Uber transportation app to gain a competitive advantage. While Uber Eats has already established a presence in 33 cities, including 27 in the United States, its success in these new territories is not guaranteed, given the highly localized nature of the food delivery business and the established strength of regional competitors.
Aggressive Global Expansion Underway

Uber Eats is making a concerted push into the meal delivery market, evidenced by extensive recruitment efforts for approximately 150 roles, including general managers, sales staff, and bike couriers. This hiring surge indicates a strategic intent to establish a significant footprint in at least 22 new countries. The company plans to launch in eight specific cities, such as Dubai and Johannesburg, by the end of the current year. This expansion follows its initial entry into the food delivery space two years prior, with a current presence in 33 cities across six countries.
Competing with Established Local Players

The online food takeaway business is dominated by strong international and local players who rely on established customer bases, extensive restaurant networks, and deep local ties to fend off new entrants. Companies like Just Eat, Delivery Hero, and Takeaway.com have built market-leading positions by focusing on advertising local takeaways and managing order bookings, often leaving the delivery logistics to the restaurants themselves. These established entities have been actively consolidating their positions through capital raises and asset swaps, such as Takeaway's acquisition of Just Eat's Benelux properties, in anticipation of increased competition from global giants like Uber.
Market Dynamics and Funding Landscape

The global restaurant takeaway market is projected for continued growth, with an estimated increase of 10 percent between 2015 and 2020, reaching US$93.4 billion. However, the funding landscape for food delivery startups has become more challenging, with investment dropping by more than half in the first six months of 2016 compared to the period since 2014, when nearly US$10 billion was invested across 421 deals. This shift suggests that companies may need to demonstrate profitability and sustainable business models, rather than relying solely on rapid expansion funded by venture capital.
Differentiated Service and Competitive Advantages

Uber Eats aims to differentiate itself by offering faster delivery times, targeting a 30-minute window with no minimum order requirements or additional delivery fees, as demonstrated in its London operations. This contrasts with many rivals who typically quote delivery times of 30 minutes to an hour and impose minimum order values and customer delivery charges. Furthermore, Uber Eats benefits from promotion through the widely used Uber car hire application, potentially providing access to a substantial existing customer base. However, the success of this strategy hinges on Uber's ability to navigate the complexities of local markets and convince restaurants to accept digital platforms acting as intermediaries.

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Can Uber Eats overcome local competition in 22 new countries?

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