UberEATS expands menu with Mumbai lessons

Here's how the on-demand food delivery app is widening its footprint

UberEats, the on-demand food delivery app, is on an expansion spree. Having rolled out operations in Mumbai in May this year, in a short span of time it has expanded to six more cities — Delhi, Gurgaon, Bengaluru, Chennai, Chandigarh and Hyderabad. In the process, it is amplifying key learnings from its Mumbai debut to enhance its offerings. Prior to its Mumbai launch, UberEats had commissioned a third-party survey to understand consumer preferences while ordering food online.

“In terms of cuisines, Indian, Chinese and pizza are the top three that are ordered online. And the top three aspects crucial to consumers while placing an order include selection, price-value and reliability, and speed of delivery,” says Bhavik Rathod, head, UberEATS India.

The on-demand food delivery app is leveraging actionable data and consumer insights to optimise a number of parameters to increase operational efficiency.

The first is selection. When UberEATS forayed into Mumbai, it began by covering a larger area including Andheri West, Powai, Bandra West and Parel. Despite a wide geographic spread, the company quickly realised that in certain areas of the city, particularly outside of Bandra, its app did not have enough selection options for consumers. Taking a cue from this, UberEATS made sure as it grew beyond Mumbai, it had 100 to 200 restaurant partners on its platform, offering more food selection and delivery options to consumers. During its subsequent launches, UberEATS has ensured a high density of restaurants on its platform.

The company also realised that besides the top three food items, the app had to offer more choices — Italian, continental and European — to attract more customers. UberEATS has gone on to suggest its restaurant partners to add Mexican food as an option in select markets like Bengaluru. With more food options available through the app, the propensity of consumer coming back is a lot more.

Next, in terms of value, UberEATS got into Mumbai with a promise of delivering orders at Rs 25. Evaluating its operations, it reckoned that since the app was still in the process of creating a value proposition for consumers, it would make more sense to provide free delivery. Therefore, the company entered its second market — Gurgaon — with a proposition of fulfilling orders at Rs 1. Initially introduced as a promotional campaign for Gurgaon, the offer has now been extended to all its seven markets. As the business evolves, the company will take a call on whether it will continue or drop the offer.

How does its business model support fulfilment of orders for almost free?

Rathod says, “We began by asking can we as an organisation push our efficiencies so high as to make our economics good at pre-delivery levels. We have been using technology solutions and user data available at Uber (the online cab service) to deliver as quickly and efficiently as possible at minimum cost.”

Bhavik Rathod, Head, UberEATS India

Moving on to reliability and speed, the company has been leveraging technology and data analytics to optimise on the number of delivery partners it needs in an area, determining what the order frequency is going to be like, improvising on order pick-up and drop experience. Optimising on a lot of small parameters, UberEATS claims to deliver in less than 30 minutes. While delivering orders, efficiency is measured not in minutes but seconds.

Drawing from data points from its online cab business, UberEATS has been able to map and optimise time taken for deliveries within cities. Taking into account the demand density in an area and the kind of restaurants, it optimises the restaurant radius to improve delivery time. For example, radius at the firm is not measured in terms of kilometres to be covered to make a delivery because this can often prove to be misleading. It is rather seen and measured in terms of how quickly food can be delivered to the customer. And this in turn determines the ideal amount of time that the delivery partners should be spending on road. This could be in one direction within 2 or 5 km depending on traffic. For instance, if one is going from Bandra towards Pali Hill and to lower Parel, one could cover 5 km in 10 minutes. But on the other way to Santa Cruz, one would cover one km in 10 minutes. Therefore, the travel algorithm needs to be maximised keeping various matrixes in view.

UberEATS has gone on to promote cross learnings within its restaurant partners network as well. Traditionally, delivery has not been a core function for restaurants. Hence, they lack expertise on what kind of packaging works best for different types of food. Industry often struggles with leaking curry containers, soggy food packed in cardboard-paper boxes.

UberEATS often goes back to its restaurant partners and educates them about the right packaging for fried, cooked and steamy food.

UberEATS faces a two-fold challenge. First, it has to continue improving on its selection — offer more and more food options on its menu — and continue increasing the number of restaurants on the platform.

“There are a lot of pockets in several cities with a lot of gaps in terms of the cuisines on offer. This is critical because conversion from a consumer will drop if they do not get the food of their choice. The second challenge lies in scaling payments options. We accept payments through Paytm. However, we continue to learn how cash is performing, challenges in handling and managing cash while delivering,” says Rathod.