Market Overview

Uber Continues To Lose Ground In UK As McDonald's Signs Just Eat As Delivery Partner

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Uber Continues To Lose Ground In UK As McDonald's Signs Just Eat As Delivery Partner

Uber Eats is no longer an exclusive partner of McDonald's Corporation (NYSE: MCD), as the latter has signed Just Eat PLC (OTC: JSTLF) as its second exclusive food delivery partner in the United Kingdom and Ireland on Tuesday.

What Happened

"We are delighted to announce that we have agreed to partner in the UK and Ireland with McDonald's," Peter Duffy, the company's interim CEO, said in a statement.

"This partnership, along with our recently announced relationship with Greggs PLC (OTC: GGCSF), will require significant investment but will accelerate our growth ambitions and enhance our market position by offering our customers the widest choice available."

Why It Matters

Uber's food delivery business Uber Eats was McDonald's sole delivery partner in the two countries until now.

Of the 30 million delivers Uber makes in the U.K. annually, about half of them come from McDonald's, a Credit Suisse Group AG (NYSE: CS) analyst Joseph Barnet-Lamb told CNN.

"Without that exclusivity, orders could be under pressure in 2020," Lamb said.

This is the second blow to Uber in the U.K. in less than three months.

In November last year, local authorities didn't renew its ride-sharing business' license in London. Uber continues to function in the city, pending the outcome of an appeal filed against the decision by the company.

Uber also sold its Indian food delivery business to homegrown rival Zomato earlier this month, in exchange for a 9.99% stake in the company, as it struggled to turn profits.

Price Action

Uber's shares closed 1.96% higher at $37.01 on Tuesday. The shares traded 0.59% lower in the after-hours market.

Just Eat's shares traded 0.25% higher at $1,138.17 in London at press time.

Posted-In: cnn Just EatNews Restaurants Global Tech Media General Best of Benzinga

 

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