Does Uber Eats Make a Profit?
To be honest with you in relation to the question of whether Uber Eats make a profit, one will make bold to say that Uber Eats does not currently make a profit as supposed.
The company has been losing money for a number of years, driven in part by intense competition in the food delivery market, as well as significant investments in expansion and new technologies.
It’s worth noting that Uber Eats operates under the larger Uber company, which also has not reported a profit.
How Does Uber Eats Make their Money?
Uber Eats makes its money primarily by charging a commission on every order placed through its platform. When a customer places an order through the Uber Eats app, a commission is charged to the restaurant for the service of connecting them with the customer.
The commission varies depending on the restaurant, but it’s usually around 30% of the total order value.
In addition to the commission, Uber Eats also generates revenue through delivery fees, which are charged to the customer for each order. These fees are used to compensate drivers for the cost of delivering the food and can vary depending on factors such as distance and time of day.
Uber Eats also makes money by charging restaurants for additional services such as featured placement, promotions, and sponsored ads in the app.
Also note, Uber Eats operates under the larger Uber company, which also has other businesses such as ride-hailing and scooter and bike rentals. As a result, Uber Eats’ revenue is not the only source of income for the company.
Is Uber Eats a Profitable Business?
Albeit it has experienced rapid loss lately, Uber Eats is one of the most successful delivery startups, with over 1.2 million delivery orders across the U.S. in 2018.
Based on figures from February 2019, we estimated that Uber Eats generated $25 million in revenue and $8 million in operating profits during that time (assuming 80% gross margins, a 30% service fee, and 30% transaction costs as profit channels).
However, this suggests that demand for Uber Eats’s services would lead to much higher levels of business volumes than implied by its revenues – making it a very profitable business.