UberEATS customers already have the ease-of-use of Uber’s mobile app for food ordering and delivery. Now they’re getting the surge pricing that Uber’s earlier ridehailing service is known for, as well.
The company announced that surge pricing would hit select U.S. cities in a blog post entitled “Delivery at Uber speed, even when it’s busy,” today.
In the post, a product manager for Uber named Ben Dreier writes:
“An arrow below the restaurant name will notify users about the additional fee. The exact amount appears above the menu, and as a separate line item before checkout and on the order receipt.”
The company justifies surge pricing for its food delivery business by saying it will inspire drivers or delivery partners to get out on the road with meals in tow when traffic, or other conditions, make the prospect of working less than appealing.
It’s the same logic company executives used when they rolled out surge pricing for rides in the first place.
Food delivery is a competitive category and Uber is not even close to the only player in the market. Competitors include Postmates, Caviar, and sites that facilitate orders for restaurants that run their own delivery operations like GrubHub and OrderUp. There are still flat-fee based options like DoorDash, too.
According to Morgan Stanley research, food delivery is already a business that generates an estimated $11 billion in sales annually in the U.S. alone. The firm projects that this market will grow to a whopping $210 billion over the long haul.
We have reached out to Uber to clarify if and when surge pricing will expand across the U.S. and internationally. We’ll update this post when we have more information.