Uber Eats Marks Germany Foray To Disrupt Just Eat's Monopoly: FT

Uber Eats Marks Germany Foray To Disrupt Just Eat's Monopoly: FT
  • Uber Technologies Inc UBER is attempting to crack down on Just Eat Takeaway.Com NV’s TKAYF TKAYY German food delivery market monopoly through employed couriers instead of gig workers, the Financial Times reports.
  • Uber Eats timed its Germany debut over the next few weeks, starting in Berlin. It wants to capitalize on Europe to strengthen its market position reflecting on Germany’s ride-hailing prospects and Uber Eats’ market share gains in the U.K. and Spain.
  • Around 370,000 couriers accounted for over 24 million European Uber Eats orders last year. However, Uber’s high commission rates in Germany led to consumers and merchants exploring different options.
  • Uber-contracted fleet management companies will employ Uber Eats’ couriers in Germany. It will pay its German partners for each order who will pay their employees, a similar model at its Geneva food delivery business after a September 2020 court case.
  • The fleet management led to incremental costs hampering expansion beyond larger cities. However, it also translated into worker management efficiencies.
  • Uber and other gig-economy companies also faced regulatory challenges across Europe, especially after the U.K. Supreme Court’s Feb. ruling in favor of Uber drivers’ classification as workers instead of independent contractors.
  • Milan prosecutors threatened online delivery services with hefty fines after a year-long probe into working practices. The Spanish government intended to offer employee status to a huge chunk of delivery workers, forcing Uber to consider a German-style employment model.
  • Last year Uber Eats exited India and multiple smaller markets in eastern Europe, Latin America, the Middle East, and Africa after leaving South Korea in late 2019.
  • Uber sold its struggling local businesses in many instances for sizeable stakes in the dominant participant. Uber’s 14.3% stake in Singapore’s Grab would be valued at over $5 billion based on Grab’s $40 billion valuations.
  • Uber Eats noted explosive market growth during the pandemic. The March food delivery grew 150% on the pre-pandemic level to a $52 billion annualized gross bookings run rate.
  • Just Eat had dominated online food ordering in Germany since Deliveroo PLC’s DROOF 2019 exit leaving back fewer capable peers. Just Eat’s GrubHub Inc GRUB acquisition will help explore Uber’s home market U.S.
  • Germany accounted for a sizable chunk of Just Eat’s profits following huge investment for “Scoober” in-house logistics network build-up in the U.K., intensifying its war with Uber and Deliveroo.
  • Uber’s latest initiative was preceded by Finnish delivery start-up Wolt’s Germany debut, snubbed by Just Eat CEO Jitse Groen.
  • Uber had already engaged multiple restaurants, including large household-name chains.
  • Price action: UBER shares traded higher by 0.04% at $55.5 in the premarket session on the last check Wednesday. GRUB shares traded lower by 3.58% at $69.8.

Posted In: BriefsFinancial TimesNewsPenny StocksTechMedia