Uber Rides App to Prompt Food-Delivery Orders

Uber is looking to navigate an expected slowdown in food-delivery orders as its ride-hailing business takes off.

Photo: Patrick T. Fallon/Bloomberg News

Uber Technologies Inc. UBER 2.24% is adding features to its app that will further entwine the rides and food-delivery businesses as it steers toward a future when a vaccinated public starts traveling, going to work and potentially ordering-in less frequently.

Uber will ping passengers requesting trips from airports, asking whether they want food delivered as they ride home.

Photo: Uber

One feature enables passengers to book and pick up meals while en route somewhere in an Uber. The San Francisco-based company said its rides app will ping passengers requesting trips from airports, asking whether they would like food delivered through its Uber Eats app wherever they are headed.

Uber’s booming food-delivery business helped it offset the downturn in its core rides operations amid widespread lockdowns last year. The changes announced Wednesday underscore how Uber plans to navigate a future where food-delivery orders are expected to slow as consumers can eat out again while its rides business takes off. Uber’s mobility business, which includes its core ride-hailing operations, has recovered from pandemic lows; March was the best month for that unit since the health crisis struck.

The company is betting the new features will make it easier to drive business to Eats as consumers take more trips. More than 10% of Uber Eats’ new users in the fourth quarter navigated to it from the rides app.

Other apps are also retooling their business for customers and restaurants in the face of an expected downturn. DoorDash Inc., the biggest food-delivery company by market share in the U.S., said Tuesday it is changing the way it charges restaurants to deliver their food, marking a shift in a business model that has met with increasing pushback.

Passengers will be able to book and pick up meals from restaurants while en route somewhere in an Uber.

Photo: Uber

Despite record revenue last year, delivery is a money-losing business for Uber and its competitors. Eats, DoorDash and Grubhub Inc. GRUB 0.50% forayed into delivering items including groceries and alcohol during the pandemic to bolster higher-margin offerings.

Uber said another change, starting in June, would enable people in certain cities across the U.S., U.K., Canada, Taiwan and Australia to combine their food and grocery orders. Users can order food from a restaurant while also ordering groceries from a nearby store. The move helps Eats drive up its order size while reducing its labor cost per delivery—both key to its future profitability.

Uber separately said it struck a partnership with Walgreens Boots Alliance Inc. that would enable people in the U.S. to schedule vaccine appointments and ride to and from the appointments through its app. It also expanded its rental-car partnerships nationwide, including rolling out a service in which drivers take rented vehicles to consumers’ doorsteps.

Demand for food delivery has soared amid the pandemic, but restaurants are struggling to survive. In a fiercely competitive industry, delivery services are fighting to gain market share while facing increased pressure to lower commission fees and provide more protection to their workers. Video/Photo: Jaden Urbi/WSJ

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Write to Preetika Rana at preetika.rana@wsj.com

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Appeared in the April 29, 2021, print edition as ‘Uber Tweaks App to Integrate Rides With Deliveries.’

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