In what can be described as a few hours of engineering work, Uber flipped a switch that would embed it even further in the restaurant ecosystem.
Uber Dine-in is a direct competitor to fledgling startup Allset, a company that allows users to book a table and meal (and pay) in advance. The premise is simple: going to a restaurant and waiting for your server and meal to appear can be a waste of time. Why not just tell the restaurant what you’d like to eat, when you’ll arrive, and pay before you get there?
Uber’s new feature eliminates delivery fees and their cost of drivers. From the TechCrunch article it appears Uber is initially marking up the price of some menu items on its webpage, though we’d anticipate Uber eventually charging a commission fee in the neighborhood of 10% should Dine-in becomes a material traffic generator for restaurants. OpenTable averages $600 per month from its customers so we’d expect Uber to eye a similar revenue goal.
As we’ve clamored in brick and mortar for a long time, distribution trumps all. Uber, recognizing that it had superior distribution to Allset, decided it would spin out a weekend coding project as a new feature. If Allset isn’t worried they’re crazy.
Granted we’d be contradicting ourselves if we failed to mention that nobody can do everything well, but this seems like a relatively trivial add-on that Uber could dominate. While G+ failed remember that Twitter and Facebook where already massive incumbents. We don’t think Uber’s efforts replace the (overpriced) brand of OpenTable any time soon, but it will probably kill Allset and others in this niche space if Uber sticks it out for a year.
Why would Uber do this? It’s the data, stoopid.
Uber and other online ordering/delivery companies know the value of merchant transaction data (while merchants and most POS companies sadly do not). As Uber and their competitors learn more about what’s selling offline they can work on their own cloud kitchen models. With Dine-in, Uber will start to see transactions in-store in addition to those that are marked to-go. They’re playing chess while merchants are… well, mostly just playing with themselves.
Of course Allset’s argument to Dine-in will surely be something to the tune of, “Oh it takes operational expertise to make our model work; Uber will have trouble figuring it out and competing against us.”
Uh, merchants are happy to go bankrupt using third party delivery. If merchants aren’t losing sleeping over solvency then they’re definitely not going to give a shit about some operational nuance for dining in.
Checkmate: Uber.
Is there any data that shows what percentage of revenue and/or order volume for UberEats/DoorDash and startups like Allset are independents or chains? My gut says chains are grabbing at any idea to drive traditional foot traffic so they’re fueling the growth but Allset’s client list looks pretty independent heavy. Also, is there any data tracking CAC’s various restaurant tech companies are pushing? At a refer a friend, give $10, get $10 (a $20 CAC) does Allset seem like a startup with too much money or is that a standard CAC for a restaurant tech company? I never thought a restaurant would ever cut off their nose to spite their face and outsource all their upselling sales to an app but who knows.
RE data, I don’t know off hand, but I could find out since we have a lot of this data. It’s something financial institutions pay for, by the way. The restaurant market is saturated, and restaurants are not particularly good operators. This leads many restaurants to outsourcing customer acquisition.