You own 6 pizza shops in the city and want to improve revenue. Do you develop a mobile app or use Uber Eats?

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You own 6 pizza shops in the city and want to improve revenue. Do you develop a mobile app or use Uber Eats?

Asked at Uber over a year ago

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Shravan Shankar · Answer 1 · 2021-11-09T02:19:46+0000

Questions:
1. How spread out are the 6 stores within the city? - Just enough to cover the city
2. Is there another goal apart from increasing revenue? - Acquire new customers and spread out the name
3. Is this only mobile apps or even website? - Both
4. Assumption: Given that I do not know how to create mobile apps, I would need to hire someone to build it out for me. Is that a fair assumption? - Fair
5. Does the chain of stores have a delivery model or is it only dine in? If so, how many delivery personnel are there? Do I need to hire more? - As of today, only Dine in.
6. Are there any constraints that I need to worry about? - No.
7. How do we plan to use Uber eats? - Is this only for the delivery person or are we looking to get on the platform as an option for the users? - We want to partner with Uber eats and show our menu for users to order on the app.

To understand the right approach for our business, let's evaluate these options using a few criteria:

Criteria	Build app	Uber Eats
Engineering effort	High	None
Time to Market	High	Minimal
Cost of Building App	High	None
Cost of maintaining App and transactions	High	None
Marketing Costs	Very High	Minimal (initial cost to feature store to users)
Time investment into development and marketing	Very High	Minimal
Cost per order	Minimal	Higher (owing to revenue sharing or percentage cut by Uber)
Operational costs (drivers, vehicle rentals/buy, Customer support)	Very High	None
Platform hosting fees	Minimal	Higher (might need to pay Uber to get on the app )
Analytics to understand performance	Need to build	Available with Uber Eats integration
Time away from running business	Higher	Minimal
Expertise required to market business	High	Minimal
Long term success (scalability)	Tougher	Easier to achieve economies of scale
Ability to create subscription program for loyal customers	Yes	Unlikely (not sure, but do not think this is possible in Uber Eats)

I would also use the partnership with Uber eats and the delivery aspect to promote custom offers for the customers to entice them to repeat order from the stores (such as adding a coupon with every order that is being packed and delivered etc.)I realise that some of these might be repetetive, but I wanted to share my thoughts across a variety of topics and compare them against my own app vs Uber Eats integration.

While a lot of the above criteria evaluation might point to partnering with Uber Eats, below is my suggestion:

Integrating with Uber Eats in the short term provides a scalable way to get the name of the Pizza Shops to the minds of the customers faster and guarantees repeat orders (assuming our pizza tastes good - it should, given that we have 6 locations in the city). I would partner with Uber eats as a trial for a period of time to understand demand and loss/gain in revenue and profits. If this is significant compared to the costs of developing the app, then I would continue.

Once I understand that we have reached a critical mass of repeat/loyal customers, I would look into the option of moving the delivery business inhouse (if the numbers make sense)

Success Metrics:
1. Increase in number of orders post partnership with Uber Eats.
(# orders per day/Week/Month etc. - broken down by store)
2. Increase in gross revenue (WoW, MoM etc) - this is pre revenue sharing with Uber
3. Increase in net revenue (WoW, MoM etc.) - post revenue sharing

Secondary metrics;
1. New vs Repeat customers on the app ordering pizzas - Broke down by day/week etc.
2. Number of customers that used the coupon provided to make repeat orders
3. Discounts totalled for repeat orders

gauri · Answer 2 · 2019-03-05T05:52:37+0000

Not sure if its the right way to answer such question but I would compare the cost associated with developing an app vs uber eats

Clarifying question

- Does the owner already has a site and a delivery service?

- Does the shop currently gets order via phone?

- Does Uber eats exists in the area where the pizza shops are located

- Have we looked at the other factors like raw material cost and confirmed that delivery service is the path to move forward with?

Considering the shop doesn't have a site and doesn't have any means of online/ via phone order and we have looked at all aspects and delivery service via app is the next best step. Let's compare the cost incurred in both

Cost of Mobile App	Cost of Uber Eats
Domain cost	Rev-share or % cut uber would take
Engineering cost of building the app & Maintenance of the app
Delivery cost: hiring of driver, renting of vehicle
Delivery management cost: let's say hire a person to make sure all order are delivered within a specific timeframe

From above, it would be wise to have a partnership with uber eats for delivery to make more revenue.

Aslan · Answer 3 · 2022-02-24T05:52:18+0000

Clarify:

Improve revenue or profit? Revenue.

Can I assume that city is a city in the US? Yes

Can I consider this is a metropol? Yes, sure

Does this pizza shop brand have their own website? Yes

Goal: There is a pizza shop chain in a city in the US i.e San Francisco and I will figure out whether they would use Uber eats or would have their own mobile app to order the food.

Customer journey:

Customer would like to order/ pickup pizza.

They search the pizzas and put them to basket

Enters the address if delivery selected)

Orders the food and whether the courier of the restaurant or courier of any food delivery app will ask the courier and courier to confirm the delivery

Analysis:

Since we are talking about total 6 restaurants I believe the restaurant has no credibility to attract the customers without any help. What I mean is that:

If we look into the AARRR metrics

If they would have their own app:

Acquisition : how can we let the people know that this restaurant has an app? What is the marketing cost?

Activation: after the acquisition, how many ppl will download the app and start using it.

Retention: how will we keep them engaged with the app?

Referral: we can give the discount for the order after each referral’s purchase

Revenue: what will be the pricing of the food on the app.

I think another the most important questions is that how will we get into the courier ecosystem? Is it going to be connected to grubhub? Doordash?

These are the questions which should be answered before the decision of creating their own app.

Decision:

In addition, as far as I know if you give many different food options to the consumers, you can get more orders. I wanted to mention that since Uber Eats provides this medium to their consumers. And you would be able to advertise your product on uber eats app. This increases the conversion rate.

In addition, the system would start searching the available courier from the pool while the consumer is putting the food to the basket.

These are important details since this is the food and we would like to delivery the food asap.

I think since this is a 6 restaurant chain and exists in SF area, Uber Eats would be the better option for them.

To improve revenue, since Uber Eats would increase the #transactions, the revenue would increase.