UberEats starves Christchurch’s FoodTaxi
After 11⁄2 years, FoodTaxi in Christchurch has closed with the loss of 12 jobs because it cannot compete against rival restaurant delivery service UberEats.
FoodTaxi owner Bas Van Wel said sales slumped the day after UberEats came on the scene two months ago.
‘‘To pay staff a fair wage and all servicing costs we can’t charge less than $11.50 to customers. But UberEats is charging $6.99.’’
Uber’s Australia and New Zealand communications officer, Mike Scott, said its food delivery service had been structured to create a ‘‘compelling’’ motivation for customers and to help restaurants manage their deliveries.
UberEats charges restaurants about 35 per cent of the price of an order, prompting some in Christchurch to pull menu items from the UberEats app because they could not make money.
Scott said the one-third meal price charged to restaurants covered marketing and technology expenses in maintaining the smartphone app.
‘‘We have a delivery fee and a service fee to restaurants. It’s been structured that way because we are helping restaurants reach new customers and it’s a compelling proposition for customers.’’
FoodTaxi’s Van Wel said he did not initially think UberEats would have such an effect on Food Taxi because he had so many different restaurants on board.
‘‘But it did. We simply couldn’t keep going; we were only a team of eight drivers but sales almost dropped to nothing – down $47,000 over three weeks.’’
After four weeks, he could not see the downturn ending and decided to pull out.
‘‘We were unable to match Uber’s price or up the commission from restaurants.’’
Internationally, UberEats was the most profitable Uber service since it started in 2015. It operates in 103 countries and is profitable in 27 of them.
A FoodTaxi customer who wanted to be identified only as Carl said he was disappointed.
‘‘It’s a bit sad to see an international business like Uber killing a local business. I used FoodTaxi quite a bit to deliver me Subways because I live a fair way away.’’
Former Uber driver Ben Wilson said he worked as a delivery driver while studying but doubted he made much money after taking into account the depreciation on his vehicle. Wilson said he would never do that work again.
‘‘It’s tempting for Uber drivers because it’s a lot easier to deliver a pizza – they don’t vomit in your car,’’ Wilson said.