Uber Technologies Inc., commonly known as Uber, was one of the most valuable startups in the transportation industry during its inception in 2009 in San Francisco.
After just a few years of pioneering and shaping ride-hailing services globally, the company branched out to other markets, including food delivery.
Uber Technologies Inc. launched Uber Eats in 2014 as a standalone food delivery service.
Users can access the door-to-door delivery service via an app, and it includes a wide range of restaurants to order takeaways and same-day delivery.
Since then, Uber Eats has expanded to major cities in North America, Asia, Europe, and Africa.
However, given it’s a subsidiary, who owns Uber Eats? We answer this question and also give quick insights into the company.
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Is Uber Eats a Public Company?
No. Uber Eats is a private company since it’s not listed on the stock market.
However, its parent company, Uber Technologies Inc., is listed on the New York Stock Exchange (NYSE) as UBER.
Who Owns Uber Eats?
Since Uber Eats is a subsidiary of Uber Technologies Inc., the transportation giant owns this food delivery service.
The owners include the founders of Uber and their shareholders.
Who Owns Uber?
American entrepreneur Travis Kalanick and Canadian entrepreneur Garett Camp founded Uber Technologies Inc. in 2009, making them the original owners of Uber.
However, Kalanick left as one of the board of directors in 2019 and sold all his stocks, severing all his ties to the company.
Meanwhile, Camp stepped down as a board director in 2020 and switched to being a board observer, focusing on product strategy.
Other top Uber shareholders include CEO Dara Khosrowshahi, Senior Vice President Tony West, Chief Financial Officer Nelson J. Chai, FMR LLC, Morgan Stanley, and SB Investment Advisers (UK) Ltd., among others.
Why Did Uber Branch Out Into Uber Eats?
Uber Technologies has expanded its market and services from ride-hailing to food delivery, package delivery, and freight transport.
Also, the ride-hailing giant has established several Uber headquarters globally, including San Francisco, New York, the Netherlands, Australia, and India.
However, why did this transportation network company specifically branch out into Uber Eats? There are three possible reasons for this business move.
Join the Food Delivery Market
The food delivery market had good potential for business growth since it had a huge market in the early 2010s because there was little competition.
During this time, GrubHub, Delivery Hero, Foodpanda, and Just Eat dominated the global market for food deliveries.
Today, the market still has an increasing demand globally.
Specifically, Technavio expects the online on-demand food delivery market to grow at a CAGR of 24.64% from 2022 to 2027, increasing the market size by $266.05 billion.
Meanwhile, Grand View Research reports that the market size for global online food delivery was $221.65 billion in 2022, and data projects it to increase by a CAGR of 10.3% from 2023 to 2030.
By launching Uber Eats, Uber captured this now competitive food delivery market, making it one of the most popular food delivery services globally.
Given the large market, Uber Technologies expected to gain additional revenue from food deliveries.
Uber Eats especially drove profit during the COVID-19 pandemic, as the lockdowns in the United States slowed down bookings in the Uber driver app.
Moreover, the cost of Uber is increasing due to current fuel surges globally.
Uber Eats had a profitable run as Uber reports a $5.8 billion revenue for 2021’s fourth quarter.
Despite the competition on food deliveries during the lockdowns, Uber, along with DoorDash and Grubhub, became one of the leading food delivery services, controlling 98% of the market.
These high figures may also attribute to Uber Eats commissions, including their 30% cuts and delivery fees. As a result, they could easily generate a revenue of $1 billion in a year.
Become a Competitor to Establish Food Delivery Companies
Uber launched Uber Eats to establish their own food delivery service and compete with other meal delivery companies in the national and global markets.
Besides launching Uber Eats, Uber acquired the local food delivery platform Postmates in 2020.
A report says Uber bought Postmates for $2.65 billion. Uber’s acquisition of Postmates made it one of the largest deals in the industry, as the two delivery giants merged.
However, despite the success of Uber Eats locally, it was tough competition in the international market.
For example, the company pulled out of South Korea in 2019 due to the intense competition in the world’s fourth-largest food delivery market.
Nonetheless, despite new competition and an increasing market, Uber established itself and Postmates as leading services in the industry.
Why Zomato Took Over Uber Eats
Zomato is one of the major meal delivery services in India, and it acquired all the stock of Uber Eats in India last 2020.
TechCrunch reports that Uber sold its Uber Eats Indian operations to Zomato for $206 million and a 9.99% stake in Zomato. During this time, Zomato had a value of around $3.55 billion.
Here are two reasons why Zomato decided to take over the Uber Eats delivery platform in India.
Consolidate the Market
Zomato acquired Uber Eats to form a stronger entity and presence in the market.
By acquiring Uber Eats, Zomato gains more workforce, allowing them to provide speedy and efficient services at low costs.
After all, Uber Eat’s contract workers are now also under Zomato.
Also, merging with Uber Eats will increase its share in the market to over 50%, beating most of the competitors.
Lastly, Zomato will have better negotiating power with restaurants across India, which can reduce the company’s losses.
Since Uber Eats had trouble competing in a market dominated by Zomato and Swiggy, this was a good deal to prevent further losses.
Beat its Rival
Zomato and Swiggy battle for customers in India, as they’re the top two food delivery apps in the country.
According to an August 2021 survey, Zomato and Swiggy each had about 70% of the market. Zomato bought Uber Eats in hopes of pulling ahead from Swiggy.
However, analyst Satish Meena told TechCrunch that despite buying out Uber Eats, Zomato still lagged behind Swiggy.
Nonetheless, this Uber deal helped Zomato expand its workforce and presence to go head-to-head with Swiggy.
Who is the CEO of Uber Eats?
Dara Khosrowshahi has been the Chief Executive Officer of Uber Technologies since 2017, managing over 70 countries.
Since Uber Eats is a subsidiary, the CEO also has control over the food delivery service.
Khosrowshahi tells CNBC that he didn’t want to take on Uber’s offer at first since the company wasn’t in a good position back then.
However, Spotify founder and CEO Daniel Ek convinced him, and Khosrowshahi thought that the opportunity would allow him to create an outsized impact with the most influential and fastest-growing businesses at the time.
Before becoming the CEO of Uber, Khosrowshahi was the CEO of Expedia, an online travel booking service.
During his management, he oversaw acquisitions that propelled Expedia and focused on mobile, increasing the platform’s traffic. His 12-year tenure resulted in the company’s stock price increase of 600%.
Prior to Expedia, Khosrowshahi was the Chief Financial Officer of IAC Travel. He also served as the Vice President of boutique investment bank Allen & Company beforehand.
Dara is from Tarrytown, New York and received a degree in engineering from Brown University.
During his entire career, his expertise in engineering and finance enabled him to lead various large companies.
How Much is Uber Eats Worth?
Statista reports that the Uber Eats delivery platform generated a company revenue of almost $11 billion globally in 2022. That’s a 31% increase from 2021’s performance.
The company also recorded an EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) of positive $551 million in 2022, unlike the negative $348 million in 2021 and negative $870 million in 2020.
An EBITDA measures a company’s financial health and ability to produce cash.
Despite struggles in the market, Uber Eats remains competitive and profitable.
Uber Eats is owned by its parent company Uber Technologies. Garett Camp and Travis Kalanick co-founded Uber Technologies in 2009, and Kalanick later stepped down and severed ties with Uber in 2019.
The company’s major stockholders include its CEO, Senior Vice President, Chief Financial Officer, and other investment institutions, such as SB Investment Advisers (UK) Ltd. and FMR LLC.
Despite the Coronavirus pandemic and market competition, this standalone food delivery service remains one of the top brands in its field globally.
If you have further questions about Uber Eats or how Uber works, share your thoughts in the comments section.