Third-party delivery service, Uber Eats, has taken a page out of the Google playbook with its latest test. In a bid to become an advertising platform for its customers, Uber Eats is testing a new service in India.
When using the Uber Eats app, customers can browse the offerings from many participating restaurants. But if this new program takes off, participating restaurants may be able to boost their visibility by paying Uber. This means that Uber Eats will be able to steer customers toward preferred restaurant options.
But the program isn’t quite as simple as paid promotion. At least not yet.
How It Works
The test underway in India is a bit more complicated. The test incentivizes restaurants to offer discounts on food bundles (like a sandwich, fries and drink). Subsequently, these specially priced offers are then marketed by Uber to their app users. And in some cases, the app users are offered discount incentives for purchasing from a specific restaurant and having their orders delivered with other customers’ orders in the same area.
The promotion sits atop the restaurant listings:
“$2 off your order — share a courier with a nearby order”
It is paired with a countdown timer (since it is trying to get people who are close to each other to order from the same place at the same time). This creates urgency and discourages customers from checking competitors.
Much like Uber does discounts for sharing rides with other passengers (a program known as Uber Pool), these grouped food deliveries can help reduce costs and make the delivery service more efficient. It’s sort of Uber Eats Pool.
A Page from Google’s Playbook
You can think of this service as similar to the way Google uses its platform for advertising. Google’s main service is to provide the best search results. But it allows advertisers to pay to jump to the top of the page for certain search terms. Google makes the majority of its revenue from these ad placements on their search results.
“They’re going to be spending those ad dollars somewhere,” says Uber Eats Senior Director Stephen Chau about offering paid promotion within the third-party delivery app.
And just like many users don’t really notice the difference between paid and organic search results, Uber Eats users may not even know that they are selecting a restaurant that has paid to be boosted. Instead, they may simply be going for what they perceive to be the best deals.
Technology publication Tech Crunch spoke with Stephen Chau, Senior Director at Uber and head of Uber Eats product development.
“If we have all the restaurants on the marketplace and we give them tools to help them grow, then this will be a very efficient marketplace. They’re going to be spending those ad dollars somewhere,” Chau said. “One of the things we’ve been experimenting with is allowing retailers to create promotions themselves and show them within the product.”
But Chau was pretty clear that Uber intends to continue to explore options for serving ads and other promotions.
“One of the things we’ve been experimenting with is allowing retailers to create promotions themselves and show them within the product,” says Chau.
Currently, promotions are limited to bundled deals. But we certainly aren’t far away from a much more straight forward paid promotion tool from Uber Eats. If Google’s history in this area is any indication, it could become a very lucrative revenue stream for Uber.
Only time will tell if this move helps Uber Eats outpace its many competitors in the third-party delivery space.
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