Please ensure Javascript is enabled for purposes of website accessibility

Uber Eats to Waive Restaurant Fees for the Rest of 2020

By Rich Duprey – Updated Jul 22, 2020 at 9:58AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

As third-party delivery grows more competitive, commission-free service could give it an edge.

Uber Technologies (UBER 4.39%) will allow restaurants to add online ordering to their websites, for delivery through Uber Eats, at no cost for the rest of the year.

The food delivery specialist said the coronavirus pandemic has given it a new understanding of the importance that delivery has in the restaurant industry's survival. But the third-party delivery market is also becoming much more intensely competitive and undergoing consolidation, and commission-free placement could give it an edge.

Man holding an Uber Eats bag

Image source: Uber Eats.

Delivering the goods

In a blog post on the company's website, Uber Eats said it commissioned the industry researchers at Technomic to discover what restaurants think about Uber Eats, third-party delivery generally, and what the company could do differently.

Some 400 restaurant partners in the U.S. and Canada were surveyed, and most view delivery as an lifeline for survival during the COVID-19 pandemic. The survey found:

  • 82% of restaurant operators say Uber Eats has been crucial to business during the crisis.
  • 75% said they would have had to close their restaurants if not for Uber Eats.
  • 81% would have had to lay off employees. 
  • Over 66% consider Uber Eats to be their preferred delivery partner.
  • 92% said they plan to continue using third-party delivery services even after the crisis ends.

As a result of this feedback, Uber Eats said it was launching a number of new products and services including restaurants not having to pay any commissions to Uber when they add online ordering to their site that allows for Uber Eats delivery. The partner restaurants will only be responsible for payment-processing costs.

That could help it attract more customers away from DoorDash and Grubhub, which just agreed to be bought out by fast-growing rival Just Eat (JTKWY 4.72%). Uber itself will be acquiring delivery service Postmates for $2.65 billion.

Rich Duprey has no position in any of the stocks mentioned. The Motley Fool recommends Uber Technologies. The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.