As delivery firms compete for consumers’ dollars, leading players are leveraging their subscription and membership programs to become one-stop shops for restaurant orders.
Uber, for its part, is seeing nearly a third of its delivery orders coming from members of its paid Uber One membership program, the successor to its Eats Pass delivery subscription, which offers discounts on food and beverage orders and fee-free fulfillment, among other perks and benefits for rides and delivery, for a set monthly or annual cost.
“About 23% of our overall gross bookings come from [Uber One] members, [and] that’s 32% for delivery,” Uber CEO Dara Khosrowshahi told analysts on a call Tuesday (August 2) discussing the company’s second-quarter earnings results.
The membership program has the benefit of not only driving loyalty for Uber Eats in the face of stiff competition from aggregators such as DoorDash and Grubhub but also incentivizes consumers to adopt other Uber services, a key goal for the company, by offering perks and discounts across verticals.
“Uber Eats customers who also order from new verticals tend to stay with us, tend to have higher frequency,” Khosrowshahi said. “And it’s really a part of the power of the platform that we’re having. If you ride with us, if you eat with us, if you drink with us, if you order groceries with us, we just become an everyday part of your life.”
This cross-vertical approach distinguishes Uber’s membership program to comparable offerings from competitors, such as DoorDash’s DashPass or Grubhub’s Grubhub+, which cost the same amount per month without offering mobility perks and discounts.
Certainly, there is a demand for food ordering subscriptions. About 4 in 10 consumers are open to restaurant subscription services, according to data from the February/March edition of PYMNTS’ Digital Divide study, “Digital Divide: Restaurant Subscribers And Loyalty Programs, created in collaboration with Paytronix. Plus, the study, which drew from a survey of more than 2,000 U.S. consumers, found that subscriptions can be a useful way to reach consumers with money to spare, as restaurant subscribers are more likely to earn more than $100,000 per year than non-subscribers.
Moreover, research from the May edition of PYMNTS’ Subscription Commerce Conversion Index, created in collaboration with subscription eCommerce platform sticky.io, which draws from a census-balanced survey of more than 1,900 U.S. adults earlier this year, found that 56% of consumers would be interested in a grocery subscription if product prices were lower.
Notably, despite murmurs that inflation would drag down Uber’s delivery business, with consumers opting for more cost-effective food options, the company’s executives maintained that this has not been an issue. Uber CFO Nelson Chai stated that there have been “more spikes and peaks” related to ongoing COVID-19 waves than related to inflation.
Additionally, Khosrowshahi argued that inflation has actually boosted capacity.
“To some extent, we could be seeing evidence where it’s helping us,” he said. “Over 70% of drivers say inflation has played a part in their decision to come on to the platform.”