How Uber Eats Wants to Stay on TopBy Jan Hogewoning | Mon, 04/13/2020 - 13:38
For our interview with Jose Garcia-Pimentel about the steps the company is taking during the COVID-19 contingency, click here
Q: Why is Uber Eats the primary choice for Mexican consumers?
A: Uber Eats is still by far the largest food-delivery platform in the country and we continue to be a launching point for new technology. Our strategy is very compelling. We are trying to understand what the customer wants as opposed to what we believe they want. With this mindset, we continue to move forward with Uber as a platform for all day-to-day activities. We want to offer solutions from the moment the user wakes up until the day finishes. In October 2019, Uber announced the acquisition of Cornershop, a delivery service platform for groceries. The company also recently introduced Uber Transit, which maps the different public transport options to arrive to a public event. In Mexico, Uber introduced JUMP, our electric bike service. Late last year, we launched our Uber loyalty program for customers. The more transactions, the more points and the more benefits the user gets. In our Uber Eats app, we use machine learning to customize every session for the user. Supposing there were three people in a room. If all of them were to open the Uber Eats app, they would get very different restaurant suggestions. There is no one-size-fits-all in this business.
Q: When can Mexico expect to have the grocery delivery service available?
A: We are awaiting antitrust approval for the Cornershop deal. After its approval, we will sign and close on the transaction. Until then, we will continue operating it as an independent business. We receive feedback from retailers and continue to explore other opportunities when they become available. Involving retailers like pharmacy stores, convenience stores and specialty stores is another way to reach more people. One example of a partner we work with is organic retailer The Green Corner. Soon, we will be able to offer everything our customers need.
Q: What benefits are you offering to your restaurant and delivery partners?
A: While diversifying the customer experience, we are creating deeper bonds with our delivery partners as well. Last year, we launched a loyalty program for our delivery partners called Uber Pro. This gets them access to favorable fares. It also offers opportunities to access Utel, a digital university with more than 20 bachelor’s and master’s programs. This is open to not only delivery partners but also their loved ones, who represent over 50 percent of the program’s users, demonstrating how our platform is igniting opportunities through education. Another partnership is with Italika, the largest manufacturer of motorcycles in Mexico. It now offers our top-tier delivery partners discounts on its products.
For our restaurants, we are enabling more and more technologies that provide them greater control over their businesses. They have access to incredible data and insights to understand what is driving their business. This allows them to improve their product offer, get better financials, support social causes and reduce waste. By default, restaurants no longer need to provide single-use utensils, which has reduced their environmental impact. Along this same line, we have partnerships with companies like Ecoshare, which is the industry leader in sustainable packaging. It now provides restaurants with favorable prices for its products.
Q: What steps are you taking to increase the reach of your platform?
A: In Mexico, we are present in 49 cities in 29 states. Our goal is to reach every Mexican, with more cities and states on our horizon. We want to go from almost 50 cities to 100. At the same time, we are working to expand our geo-footprint in the cities where we already operate. We recently expanded to a few very large neighborhoods on the eastern side of Mexico City. We want to continue our expansions throughout next year, aiming to increase our square kilometer coverage by 30 percent in 2020. Considering the situation we are in right now with COVID-19, offering restaurants a wider public is very important to their businesses.
Q: What methodology do you use to determine where to expand?
A: Expanding to new areas requires onboarding restaurants and delivery partners. As is the case with any platform or business model, it has to be correctly balanced. You need the right balance of supply and demand. This means not only a pool of restaurants but also the right restaurants. We are partners with top brands, which sometimes have amazing footprints themselves. Combining larger scale operations with small businesses is ideal. Our philosophy is never to compromise on quality.
One useful tool to expand supply is through our virtual restaurant concept. This is a technology that allows you to predict what type of food will be successful in a specific area. If there is a restaurant that meets these needs, we tag them as a high-value adding restaurant and try to have them join the platform. If no restaurant is available, we work with existing partners to develop that offer ourselves. We can help restaurants decide how to expand or best use their existing assets. If we see a restaurant has particular ingredients and equipment, we can make suggestions on certain food items they could try. The restaurant can then accelerate its sales and grow sustainably in a variety of ways.
Q: How important are exclusive restaurants to Uber Eats?
A: This is a way of engaging restaurants where there is a lot of faith. We get to know each other so well that the restaurant is ready to make a deeper commitment. I can count the number of exclusive relationships on my fingers: we do not have that many. Mora Mora is a fantastic example. They have used their own insight and ours to develop a daring business model, offering vegan chilaquiles, vegan molletes and more. They are willing to take risks because of our commitment. An exclusive relationship is not for every single restaurant. It requires investment. As such, we do it on a case-by-case basis. We do not believe exclusivity is the way to win this marketplace. I would say, generally, that most restaurants are better off working with as many sales platforms as they can.
Q: How important are low prices to customers?
A: Obviously, prices have to make sense. Anyone who drives themselves out of the market will lose. Affordability will always have a role in every single business. Promotion plays a role, and you have to be smart and fast in acquiring the user, selling the experience and keeping them. However, I do not think subsidizing food or giving away free things indefinitely is the right approach. This will end up hurting somebody in the end. The right approach is to provide a consistent quality experience for users.
Our platform is by far the most reliable. What we have found out is that users in Mexico prioritize experience over the lowest prices. People are influenced by good service in restaurants and we want to mimic that. There is nothing worse than ordering your food and not having it arrive. This happens to us maybe once or twice in every 2,000 or 3,000 orders.
Q: What are your expectations for 2020?
A: This year will prove to be critical in terms of how industries develop over the next five or 10 years. As for Mexico, we will have a much better idea of what to expect in the next three to four years. Uber Eats will continue investing in cities that we serve, supporting our stakeholders. There is uncertainty in the future and we will try to be a player that reduces uncertainty as much as possible. We have the right strategy and our goal is to be better in executing it. Uber is famous for its execution ability and this makes me 100 percent confident. There is much more room for new partnerships between Uber and other companies and industries. Any strong retailer that wants to join the platform is an option. I think we are only scratching the surface. In terms of particular customer segments, one group we definitely need to crack is 60-year-olds and above.
Uber Eats is the largest food delivery platform in Mexico. It is present in 49 cities spread over 29 states. In October 2019, the company purchased grocery delivery platform Cornershop