The Reason behind UberEats’ new fee for Portland: Developing an UberEats clone

UberEats has been the premier choice for food delivery for a wide range of customers and has emerged as one of the influential brands of 2020, even amidst a global emergency. A variety of reasons can be attributed to this growth spectacle: versatile food range, super-fast delivery, convenient payment methods, inherent brand value, etc. But if there is a single thing that can deliver its value proposition, it is the affordable pricing the app offers. It can well be regarded as its differentiator-in-chief among the competitors in the industry. UberEats have adapted this competitive pricing strategy in all of its operating markets to leverage competitive advantage.

Then came the sudden announcement of UberEats charging an extra $3 surcharge on all orders from restaurants in the US city Portland. This bizarre imposition has met with much skepticism, especially among the business-circles that we’re unable to break down such a decision which comes under the circumstances mostly favoring the UberEats Clone apps industry, where competitive pricing is one of the core values.

What happened in Portland?

Portland’s Marketspace:

With the estimated growth figures that suggest a 600% rise in the market (US Food Delivery market) and revenue over $30 billion (source: mcdonaldwhsl.com), On-demand food delivery has much moved from the classic pizza delivery to delivering almost everything from food, grocery, and even cold-storage products. This trend has resonated all over the US, including the Oregon city of Portland. Portland has a bustling market for online food delivery, with some of the fiercest competitors locking horns. Food delivery companies like UberEats and Doordash dominate the scenario, and the primary point of value creation lies in providing discounts and payment slashes.

The infamous ruling:

The Portland city council, based on the suggestion of Portland Independent Restaurants Alliance and Asian Pacific American Network of Oregon, has issued an ordinance that limits third-party food delivery apps on charging restaurants as commission to 10%. This has been in place since March 12 and is informed to be in order as long as the pandemic extends. This law’s central theme seems to ‘reduce the burden of an already ailing restaurant industry’ from overcharging. The rule also includes a 5% limit if the third-party delivery apps allow the restaurants to transport on their own or facilitate picking up of food packages by customers ordered through UberEats Clone apps.

What does it mean for UberEats?

The ruling has expertly cut down UberEat’s revenue. It makes it illegal to decrease the amount paid to the delivery workers as a complementing measure for making up for lost revenue. This prompted Uber to charge a new charge under the moniker “The City of Portland Ordinance” that imposes a $3 fee on every order placed within Portland’s city limits. Uber has informed that the new fee aids the already ravaged profitability range that helps to pay drivers and continue their employment. This announcement comes under the circumstances of Uber’s blockbuster deal of acquiring Postmates, another top player in the food delivery industry. Uber would also be liable for a $500 fine for every order for any claims of breaching the ordinance. These peculiar state of affairs urged the company to term the law “Very tough” and encouraged customers to order from restaurants outside the city jurisdiction to avoid the extra fee.

What does the City council say?

The office of Portland’s commission has maintained that the ordinance is for protecting the livelihoods of restaurants and ensuring their survival and shielding them from the potential swindle by third-party apps. It also stated that the commission fee that fluctuates between 10% to a high of 30% is destructive for restaurants struggling to cope up and operate and pay their employees during the ongoing onset of COVID19. The restaurants owned by ethnic minorities were most affected, the statement asserted.

What does the food delivery community say?

The companies expressed their concerns about the weakening of revenue streams and stated that the law would hurt drivers’ compensation and employability. The reason cited for the claim is the projected decrease in the number of orders as prices are spiked everywhere. It remains unclear whether the restaurants increase the price range or not.

Conclusion: 

Food Delivery business is one of the most successful ventures for aspiring entrepreneurs, and the UberEats clone app is at a historical demand. Even though the increased fee is feared to decrease sales volume, the sheer need for online delivery is enough to rejuvenate the scenario and drive sales again. For beginners, the best way to cash in a favorable environment is to get an UberEats clone app immediately, and Appdupe is the preferred name due to its immense expertise and ability to deliver on time.

Author

Marketing is my soul mate and writing is my side kick. Using my writing skills to share the knowledge of app development and upcoming technologies.