Uber & Amazon are launching food delivery apps
Steve’s breakdown: UberEats launches next month and Amazon is launching PrimeNow about the same time.
Both will be charging more than other deliveries so they might have to spend more on marketing.
NEW YORK, NY: Uber and Amazon are launching slick new apps that promise to widen the market for high-tech food delivery — but the bill for restaurants won’t be cheap.
Uber will begin in March to deploy its vast network of taxis and bike couriers to deliver gourmet pizzas, burgers and salads through its new “UberEats” platform — and will demand an unprecedentedly steep 30 percent cut of the bill from restaurants, sources told The Post.
Amazon won’t be far behind, with plans to charge eateries 27.5 percent of the check, according to interviews with persons briefed on the situation and documents reviewed by The Post.
Amazon is preparing a mobile ordering platform that will include more than 300 Manhattan eateries through its Prime Now app, sources said.
That’s substantially above the 12 percent to 24 percent that Grubhub and Seamless charge restaurants for food orders, sources said — a rate that is already seen by many mom-and-pop establishments as punishing.
It’s also ahead of the 15 percent to 23 percent charged by rivals like Delivery.com, DoorDash, Postmates and Caviar.
Reps for UberEats have lately told cash-strapped restaurants that charging any less would be “unsustainable,” sources said. The new, full-scale platform replaces a more limited quick-delivery service for lunch launched last year that’s being renamed Uber Instant.
On top of the 30 percent cut it’s charging restaurants, UberEats has been adding a $5 delivery fee to customers in a recent pilot program in Toronto, sources said.
That’s on par with delivery fees of between $2 and $7 typically tacked on by services like Caviar and DoorDash.
Online giant Amazon, which began rolling out the “Amazon Restaurants” feature on its Prime Now app in Chicago last month, has waived delivery fees thus far.
“They’re still trying to really figure out what this is,” one source said of Amazon’s plans. “Is it [a customer] acquisition strategy for [Amazon Prime], or something they’d like to open up to the broader public?”
Officials at Uber and Amazon didn’t respond to requests for comment.
Despite the stiff fees, some Toronto eateries have already acquired a taste for UberEats.
“We’ve had a very good experience with Uber — no complaints,” says Gary Quinto, a partner at Pizzeria Libretto Group, which operates a half-dozen area restaurants.
Still, it’s unclear what kind of threat the higher-priced UberEats and Amazon apps pose to rivals. Mighty Quinn’s Barbeque, about to open its fourth location in Manhattan, currently uses Caviar for deliveries. The chain may try UberEats when it launches.
“It’s kind of volume-contingent — we look at gross-profit dollars instead of gross-profit percentages,” says co-founder Micha Magid, adding, “We don’t need to be on every single platform.”
Some players pooh-pooh the idea that food deliverers need fat percentages to survive.
Munch Ado, a new restaurant search engine that’s in the middle of raising $20 million, says it delivers better service than Seamless and Grubhub’s no-frills site for just 8.5 percent of a restaurant’s bill.
“If we’re going to build a long-term, sustainable model, the pain threshold for restaurants is 10 percent,” says Munch Ado Chief Executive Puneet Talwar.