Zomato eats Ubereats (pun intended)

screengrab from uber insta page

So, Uber is continuing to cut flab, off loading things all over the world. It is inevitable that they will continue to exit some markets entirely or specific segments.

Now, it’s Uber India’s turn. Uber Eats, the food selling division, is being given to Zomato. In turn (as is the norm by now), Uber will end up owning a stake in Zomato, as they have done in China and Russia (exiting the market in return for stake in a competitor’s business).

I never used Uber Eats

There is a running joke in my family (especially my mom), that my wife and I are single handedly keeping Swiggy/Zomato in business, along with other online outlets such as dominos, big basket and Amazon. We rely on online shopping to that extent.

Despite this reliance, I never ordered a single item on Uber Eats. All the more surprising considering that I have more than 2000 rides logged on Uber. I am subjected to significant cross promotion by Uber, which I have successfully ignored.

Perhaps, the issue with Uber Eats, is that, nobody knew about it, outside of metros. I remember this service called food panda (which belongs to Ola, I think) which faced a similar issue. At first, I was under the impression that Uber drivers themselves were delivering food as well!

There was no cross promotion between Uber and Uber Eats in the app. Every now and then, there would be some email about offers and such but that’s about it. Also, there was something about the design of Uber Eats menu, which made it seem like everything being offered is super expensive. It could just be me.

Zomato and Swiggy — their deep discounts

The thing that really killed Uber Eats, is perhaps the sheer amount of deep discounts that Swiggy and Zomato are dolling out. There is this fundamental difference between Uber and Zomato/Swiggy. That is the startup effect — spending all that venture capital money.

Uber is a publicly listed company. It no longer has the luxury of burning cash for the sake of chasing market share. The original venture fund folks want their returns and they will be pushing to cash their cheques. Uber has lost a ton of value since it went public (high of 46 to the current average of 30), so raising new cash is difficult and possibly dangerous.

That means, no more giving away free stuff.

Zomato and Swiggy, are still in their startup mood. Just like Oyo, and even Jio (which is not a startup but its acting like one due to its backing). They are chasing market share and are giving away food for free. Uber cannot afford do that. Those days of honeymoon and reckless spending are long behind it.

Year and Half worth of discounts

Zomato/Swiggy came to Mysore about a year and half ago. I have been ordering constantly from them, and I still cannot remember a single day when I paid full price for food. I hope, someone at Zomato/Swiggy will not read this artice and disable coupons for my account (touchwood), but yeah. Every day, I open the app there is a huge array of discounts. I travel a lot, and the discounts travel with me to to cities all over India.

I dont think Uber was ever that aggressive with discounts. Further, Zomato/Swiggy have that local feel to them. Like they are brands built and raised in India while Uber has that distinct foreign feel to it. Of course, just like Flipkart (which is now officially owned by US company Walmart), these companies are primarily owned by/or have large stakes held by folks outside India.

I asked my wife about Uber Eats (she is just as active as I am on in terms of using these online apps and online shopping) and she only, barely recalls hearing that name.

End Line

All in all, conslidation is inevitable in any industry. We are down to roughly 3 telecom players in India. Look at the big studios in Hollywood. 20th Century Fox is eaten up by Disney. I remember 2 years ago when Uber was giving flat rates and generous discounts for rides day and night. They also did the same thing to drivers. Drivers would speak about (2 years ago) being able to make thousands of rupees every week in incentives for completing x number of trips.

All that has stopped now. I have seen Uber surge pricing go 2X, 3X and even 4 X almost everyday during peak hours. It’s a good thing that I work from home. Drivers no longer collect hefty incentives.

I would give perhaps another 6 months or so of these discounts. After that, belt tightening will begin at Zomato/Swiggy as well. Prices will normalise (aka increase).

The thing is, unlike telecom, food is something that is not centrally regulated. With taxi travel. If the prices go higher than expected, I could just switch to a local auto or get my own car + driver combo. Same with food. If they start charging too high a price for delivering food (Zomato/Swiggy dont make their own food. They simply deliver them from point A to point B), I could just make my own food or collect it myself.

I never knew Uber Eats, so I wont miss it. Food Panda, is already gone. And, we are back to duopoly in the food delivery segment too. Let the price rising begin!




an online publication about tech, training, rants and romance. updates every wednesday.

Recommended from Medium

What is Google in 2019?

Actual à la Carte

The Tv Industry Has Nowhere to Go But down

How Do You Spell CRM Evolution for Startups? With 4 C’s

Google revokes Android license from Huawei: What does this mean

A small business to start during the pandemic.

Subscription Models in Travel

Big Data + Cognitive Technologies = Supply Chain Excellence

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store


Freelance Tutor — Coding, Generative Art and Photoshop. Full Name : Vijayasimha BR

More from Medium

Best Offers App idea - An app that gets all the offers based on your credit or membership cards.

How to Join Toptal: A Detailed Strategy Guide

WhatsApp is working on a new interface for voice callsWhatsApp is working on indicators for…

SMEs and Web Developers: who do you need to hire for your project?