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The Wall Street Journal reports this morning that Uber "is preparing to go live with a full-scale meal delivery service across 10 cities in the U.S., an expansion that will test the company’s ability to use its drivers to move goods.

"In the coming weeks, customers in such cities as Los Angeles, Chicago, New York and Austin, Texas, will be able to use a new, dedicated UberEats app to order from the full menus of dozens of local restaurants and have their food quickly delivered by an Uber driver."

Uber seems to believe that despite all the competition in this space, much of it funded by venture capitalists looking for the next big thing, it can turn the segment into a new and profitable revenue stream. And there will be challenges, like "converting Uber drivers into delivery experts. Delivering food creates new challenges for drivers, who have to get out of their cars to pick up the food from a restaurant, quickly shuttle it to their destination and sometimes park illegally while they wait for customers to appear at the curb."

The Journal reports that "Uber employs teams dedicated to UberEats in each city. They all plan to draw on what the company learned from its test in Toronto, including the discovery that typical customers prefer to rotate through about five of their favorite places. In Toronto, Thai food was the most popular order for dinner."

According to the story, "Uber will continue to offer its lunchtime service for deliveries under 10 minutes, renaming it Instant Delivery. Some drivers who deliver for Instant Delivery are paid on an hourly rate and others are paid for every meal drop-off.

"The company, which now offers its ride-hailing service in 375 cities world-wide, declined to comment on how soon its food delivery could expand to additional cities. On its website, Uber currently lists an opening for a general manager of UberEats in Paris."

The Journal story makes mention of heightened competition, which is illustrated by a Boston Globe report that Peach, a text-based lunch delivery service, has expanded from Seattle and San Diego to Boston. According to the story, Peach uses text messaging rather than an app to connect consumers to a variety of restaurants in the Boston area.

"Every morning, users will receive an automated text with three different lunch options from the day’s participating restaurant," the story says. "It includes a meat, vegetarian, and lite option, all priced between $9 and $12, that will be delivered to your office by 12:30 pm ... Tax, tip, and delivery are all included into the price, the service’s site states."
KC's View:
I think that one of the challenges that Uber is going to face is a kind of simmering unease with some of what we hear about its drivers, like the one in California who is accused of breaking a woman passenger's jaw after they disagreed about the music being played in the car.

This kind of stuff is finding its way into popular culture. last night's "Criminal Minds" featured a driver for an Uber-ish service who was kidnapping patrons and then cutting their heads off in a guillotine. (You gotta love "Criminal Minds," which must have some of the more depraved - and I say this with utter admiration - writers working today.)

Nevertheless, while there almost certainly will be companies washed out by all the competition, there certainly seems to be a lot of momentum for this general business model. Traditional food marketers ought to be thinking about how to cash in by targeting their existing customer base; after all, they won;t have to build their customer lists from scratch, and they have data about what people want and need.