Uber Eats taps into local township market

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Uber Eats says it is the first international food delivery app to launch in Soweto.
Uber Eats says it is the first international food delivery app to launch in Soweto.

Uber Eats SA is now targeting the local township market, expanding to the country’s biggest township, Soweto.

The Uber Technologies-owned food delivery business says it is the first international food delivery app to launch in Soweto.

It has established partnerships with some of Soweto’s popular restaurants, including Just Badela, Chaf Pozi and Moja Café, which offer a selection of food options to residents of Jabulani, Pimville, Orlando East and Diepkloof.

The app, with over one million downloads locally, operates in Johannesburg, Pretoria, Durban, Cape Town, Stellenbosch, Paarl, Pietermaritzburg, Bloemfontein and Port Elizabeth.

The delivery service says it has provided employment opportunities to over 300 000 people globally and aims to create hundreds of flexible work opportunities in SA. One such way is through its new partnership with Kliptown Youth Programme, whose youth will work as delivery partners throughout Soweto.

Speaking at a launch event in Soweto yesterday, Ailyssa Pretorius, GM of Uber Eats in SA, said: “Launching in Soweto has always been our plan, and locals from Soweto have been calling out for affordable and reliable food delivery for some time now.

“We are thrilled to be answering this demand with Uber Eats. Since we launched in SA two-and-a-half years ago, we have been blown away with the popularity of food delivery, and we can’t wait to give the people of Soweto access to technology that will truly transform the way people eat.”

Uber Eats says it is also offering unemployed Soweto residents the chance to deliver food, using bicycles.

With a presence in over 500 cities around the world, the food delivery service says it has transformed food delivery in SA by offering a wide selection of food options, delivered in a maximum of 35 minutes for only R10 a delivery. It has over 100 000 restaurant partners in 35 countries.

Last year, Uber Eats acquired South African-founded restaurant technology provider orderTalk, for an undisclosed sum. OrderTalk integrates with more than 10 of the leading point-of-service providers and most major payment processing vendors.

The online food delivery space is highly competitive all over the world and SA is no different.

Uber Eats competitor Mr D Food announced in August that it had hit a million downloads.

Collectively, the two food delivery apps account for 90% of South Africa's third-party fast food delivery market, says SimilarWeb.

Another key competitor, OrderIn, which was launched six years ago in SA, has gained much traction, with a network of over 1 200 restaurants in all the major metropoles.

Long road to profit

As Uber Eats continues with its global expansion strategy, Uber’s ride-hailing arm is losing money faster than it makes it, after its initial public offering earlier this year.

According to Reuters, Uber reported a $1 billion loss in the first quarter, as the ride-hailing service injects investment in building up its food delivery and freight businesses, sending revenue up 20%.

The company’s revenue of $3.1 billion matched the high end of the range Uber forecast for the quarter and the loss of $1 billion compared with the company’s forecast of $1 billion to $1.11 billion, notes Reuters.

While Uber Eats still only represents a small fraction of Uber’s overall business, the food delivery arm has accelerated over the past three quarters as it expands globally, according to a report by Fortune.

“Some folks believe the food category can be larger than the ride category,” Uber CEO Dara Khosrowshahi said during an earnings call with investors.

“If that’s true … that would be an enormous win for us.”

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