It’s no doubt that Uber consistently tops our list of ridesharing companies.

But Uber services don’t stop at ridesharing.

In fact, the company has built a lucrative, dominant, delivery platform that is rivaling the biggest names in the delivery space, such as Postmates, DoorDash, and GrubHub.

You have  likely heard of the service, but what is Uber Eats exactly?

How does work, and what kind of services does it provide?

Read on to learn more about the food delivery service, and how it works for customers, restaurants, and drivers.

What Is Uber Eats?

Uber Eats is an app for Android and iOS that connects customers with delivery drivers and nearby restaurants.

There are three separate parties on Uber Eats:

• Restaurants: Independent restaurants that list their food on the Uber Eats platform. Uber Eats looks for drivers willing to deliver orders from those restaurants.
• Delivery drivers: These drivers are usually independent and not affiliated with any restaurant.  Drivers go to the restaurant, pick up the food, and deliver it to the customer.
• Customers: customers find restaurants they want to order from and place an order.

Uber Eats connects all of them.

Some restaurants may choose to use their delivery drivers, but the majority of restaurants do not.

In addition, customers sometimes have the option to pick up orders themselves.

Are Uber and Uber Eats the Same App?

No, and yes.

Uber and Uber Eats are two separate apps.

Uber is for ordering car rides, while Uber Eats is for ordering food deliveries.

Nevertheless, Uber has started to make a version of Uber Eats available in the main Uber app, so users do not have to download two separate apps.

To use Uber Eats in the main Uber app, open the app and click on “Food” instead of “Ride.”

The version of Uber Eats in the main Uber app offers a similar experience to the Uber Eats app, with only minor differences in the interface.

Nonetheless, it is slightly more limited, so for the full Uber Eats experience, you’ll need the Uber Eats app.

For example, if you use Uber Eats in the main Uber app, you might notice that there is no “Frequently Bought Together” section when ordering a dish.

The Uber Eats app does have that, making ordering several courses at once easier.

Key Differences Between Uber and Uber Eats

The main difference between Uber and Uber Eats is that Uber is for ordering rides, while Uber Eats is for ordering food.

If you need to get from point A to point B, you can place a request in Uber, and Uber will connect you with a driver willing to take you there.

Uber Eats is for ordering food.

You can’t use it for ordering rideshares — the Uber Eats app is exclusively for restaurant orders and, depending on your location, grocery or convenience store orders.

Uber Eats Business Model

In this section, you’ll learn about the Uber Eats business model, how it makes money, and more.

Overview

The Uber Eats business model is pretty simple.

Uber Eats doesn’t operate a delivery fleet — it doesn’t employ drivers directly, nor does it own any restaurants or delivery vehicles.

Because of that, its overhead costs are low.

Uber Eats simply connects customers with restaurants and charges both of them for doing so.

Since its drivers are not employees but 1099 independent contractors, Uber does not need to pay them a fixed wage—instead, drivers earn money for each delivery they make.

Uber also does not need to give them standard employee benefits like health insurance.

Everyone wins here.

Customers win because they get the convenience and flexibility of having hundreds or thousands of restaurants at their fingertips, which they can order from within seconds.

They can browse meals and food options without speaking to anyone on the phone, and they can search for specific things they like.

Orders come straight to the door.

Delivery drivers win because they get to work on their schedule.

Granted, they don’t get benefits like standard employees, but they don’t have fixed hours either; they can start and end work whenever they feel like it.

If they work more, they will earn more.

Restaurants win because it gives them publicity and allows hundreds of thousands of users to browse their menu options and place orders.

They can upload pictures of each menu option on the app, offer discounts, and make sales.

Restaurants don’t even need to buy a fleet of delivery vehicles or employ delivery drivers, which can be too expensive for small eateries.

How Does Uber Eats Make Money?

Uber Eats makes money by charging both customers and restaurants.

Customers pay Uber Eats fees when ordering through the app.

Uber Eats currently charges three different fee types:

• A delivery fee, which varies based on the distance to the restaurant.
• A service fee, which is 10% of the order (with a maximum of around $4, depending on your country).
• A small order fee of $2 for orders under $10 (again, this may vary slightly based on your country).

If the restaurant employs their delivery drivers, they set the delivery fee, and there is no service fee.

Uber Eats pays its drivers based on how much they drive, but they take a percentage of customers’ fees.

That percentage is usually between 15-30%.

In addition, Uber Eats charges restaurants a commission of 30% on each order.

So, if you order a pizza for $20, Uber Eats will take $6 from the restaurant, and the restaurant will get the remaining $14.

That’s in addition to any delivery and service fees you pay.

However, Uber Eats only charges restaurants 15% if they use their delivery drivers and for pickup orders.

How Much Does Uber Eats Make Per Year?

Uber Eats has been growing over the past few years, and its yearly revenue has skyrocketed.

Here is how much it made in the past four years, according to Statista:

• 2017: $600 million
• 2018: $1.5 billion
• 2019: $1.9 billion
• 2020: $4.8 billion

Keep in mind that this is revenue, not profits.

Uber Eats accounted for 22% of the food delivery market in 2021.

Why did revenue shoot up in 2020, almost double that of the previous year?

The most likely answer is that due to the Covid-19 pandemic and related shutdowns, people stayed at home more and ordered food through Uber Eats instead of going to restaurants.

It remains to be seen how its revenue will be impacted by the lifting of the lockdowns, now that many people are starting to dine in again.

Long-Term Direction of Uber Eats

The forecast for Uber Eats is looking good.

It recently acquired Postmates, a major competitor in the food delivery market in certain large cities in the US and Mexico.

According to a press release from Insider Intelligence, Uber Eats is expected to bring in $19.34 billion in sales in 2021, and its market share wiki increase to over 35% by 2023.

Right now, DoorDash has the largest market share.

It is also possible that the Covid-19 pandemic will have long-lasting effects, with people becoming accustomed to ordering food via Uber Eats and other significant players in the online food delivery industry, like Grubhub.

They may continue to do so even after restaurants open.

Pros and Cons of Uber Eats

Uber Eats has both good and bad parts.

Let’s quickly review the pros and cons of Uber Eats.

What Is Good About Uber Eats?

As I explained above, Uber Eats is advantageous to customers, restaurants, and independent workers.

Here are the pros of Uber Eats:

It’s incredibly convenient and makes ordering food on the fly a breeze.

You can browse a large variety of food options without feeling pressured to commit.

You can also order coffee from cafes like Starbucks.

Sometimes, there is free delivery.

It operates in all major cities in the US and Canada, including Miami, Atlanta, Toronto, and more.

It also operates in many countries, including Australia, New Zealand, and the United Kingdom.

In many cities, Uber Eats now allows customers to order small items from groceries or convenience stores, such as 7-11s.

Independent workers who don’t have a job or want to make extra money in their free time can earn by delivering food in their cars and even bicycles or motorcycles, depending on the city and country.

Restaurants can get a lot more exposure than otherwise possible.

What Is Bad About Uber Eats?

Despite all its good parts, there are some drawbacks to Uber Eats.

Let’s review the disadvantages of Uber Eats.

Delivery and service fees can be high.

Even a small order can quickly rack up extra fees, making ordering from Uber Eats a lot more expensive than ordering the traditional way—calling the restaurant and having them deliver to you.

Add to that a tip!

If you don’t reach the large order minimum of $10, you will pay a $2 fee.

Menus on Uber Eats are often more expensive than dining in the same restaurants, even when directly ordering from the restaurants.

That’s because Uber Eats charges restaurants commissions of up to 30% on orders.

That forces restaurants to raise their prices.

Independent contractors working for Uber Eats will miss out on perks regular employees enjoy.

They’ll have to take care of their health insurance, save for retirement, and more.

How Uber Eats Works for Customers

Here is a quick overview of how Uber Eats works for customers.

Browsing and Ordering Food

Once you’ve created your Uber Eats account and logged in, enter your address to see available restaurants near you.

At the top of the screen, you can choose between “Delivery” or “Pickup.”

You can enter a search term or browse categories to find a cuisine you like.

Click on a restaurant to see its menu.

Select a dish you want to add to your cart.

You can add as many dishes as you want to your order.

Then, go to the checkout to view the order total and pay with PayPal or your credit card.

Pickups and Drop-Offs

If you’ve chosen “Pickups” at the top of the screen, you’ll see restaurants accepting pickup orders.

After placing the order, you’ll have to pick it up yourself when it’s ready, so make sure you have a car, or the restaurant is within walking distance.

Otherwise, choose “Delivery.”

The restaurant will complete the order, and a delivery person will pick up your food and deliver it straight to your house.

You can specify where they should leave it, or you can meet them in their car.

You can track the order in the app and see where your delivery driver is in real time—the exception is if the restaurant is using its delivery driver.

Ratings and Tips

After your order has been delivered, you can rate the restaurant and delivery driver.

You can also tip the delivery driver — it’s recommended but optional.

How Uber Eats Works for Drivers

Here is how the food delivery platform works for drivers.

Whether you’re doing Uber Eats bicycle delivery, or you’re driving with your own car, the process is the same.

Food Pickup

After you’ve accepted an order, you must go to the restaurant to pick it up.

The restaurant might specify where to wait, or you may wait inside.

Double-check your order before leaving to ensure you have the right one.

Navigating to Customers

After you’ve picked up the food, head to the address specified in the app, the app should show you directions, but you can use Waze or Google Maps if that works better for you.

Food Drop-Off

Finally, drop the food off at the address.

If the customer specified to leave it in a particular spot, such as at the front door, leave it there.

Otherwise, hand it directly to the customer.

How Uber Eats Works for Restaurants

When signing up for the Uber Eats merchant program – outsourcing food deliveries to the platform – there’s a lot to learn.

To simplify though, the process is pretty simple.

When a new order comes in, your screen will flash green, and the Uber Eats app will make a sound.

You can then enter the order into your POS, print it out, or verbally inform your kitchen staff about it.

You can see the ETA of the driver who accepted the order to determine when to have the order ready.

If the customer is picking up the order, they can let you know in the app that they have arrived.

Frequently Asked Questions

Here are answers to commonly asked questions about Uber Eats

Wrapping Up

Uber Eats is one of the most popular food delivery apps worldwide.

Operating in many countries, it allows consumers to get food delivered within a short time straight to their front doors.

Hopefully, you now have a pretty good idea of how it works.