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How UberEats Picks New Food Delivery Markets and Other Morsels From the UberEverything Guy

It's the next step in Uber's efforts to own urban logistics.

Uber’s food delivery service UberEats has made its way to two new cities. Now in addition to Los Angeles and Barcelona, you can order food from local hot spots in Chicago and New York.

You may be asking yourself, “Wait, don’t a million other companies do this already?” The answer is yes. Uber is late to the food delivery game, but it’s banking on the fact that it can do it better, faster and cheaper. It’s also rolling out to cities its competitors haven’t yet reached.

Uber has beaten the second wave of American food delivery startups — Sprig, SpoonRocket, Munchery, Postmates and Caviar — to Barcelona. Postmates was first of these to reach the American cities, but Uber beat three of the others to LA, two of them to Chicago, and two to New York.

UberEats is the next step in Uber’s efforts to own urban logistics and is the first delivery product the company has taken beyond a single city in the U.S. UberRush, its courier service, is only in NYC; UberEssentials, its beta delivery product for household goods, shut down in January.

We chatted with Jason Droege, the head of UberEverything (which is the term the company uses for its experiments), to get the lowdown on why UberEats is in Barcelona but not SF, how tipping works and the role played by supply and demand. The interview has been edited for clarity and length.

Re/code: Why didn’t you expand to San Francisco next? Is it because all your competitors are there already?

Jason Droege: We don’t look at it that way. Some of those competitors are in New York and Chicago as well. Whenever we look to roll out we pick cities based on various profiles.

In LA you have hot spots that are one to two store locations and those restaurants have a tough time scaling those operations. When we look at New York and Chicago we see those [same] characteristics.

San Francisco has a similar foodie culture with restaurant hot spots.

Obviously a lot of cities fit those characteristics but these are the two we chose. The other thing is density of downtown areas. It’s difficult to go out in these areas, there’s things like [20 minute] lines you have to deal with.

What made you roll out UberEats in Barcelona in February? It seems like a pretty big jump to take the program international when it was only in one U.S. city at the time.

Uber is a global company. Barcelona seems like an opportunity to experiment with the European market. Not everything that works in the United States works abroad, so we wanted to get going on figuring out what the differences [are].

My team is responsible for running Uber globally, we’ll spin up and spin down experiences in various areas.

Why did you rebrand from UberFresh to UberEats?

Eats allows us to identify the product a little more strongly as a food brand and [it] gives us the ability to offer all kinds of food.

We saw the opportunity to take what the restaurant has, which in a lot of ways is their invention. The owner has spent years perfecting a pastrami sandwich. The demand becomes so high because it’s the best. That restaurant owner has a limited ability to meet the demand.

What UberEats brings is the ability to reach a city-wide audience and scale the best food from the best places.

Tell me about how you calculate the delivery fee.

It’s $3 no matter how many meals you offer. There’s no ability to tip, just like Uber doesn’t have the ability to tip. People love that they don’t have to tip on Uber, it enables a very seamless experience. I hail my Uber or UberEats, it comes to me, I’m handed the food and I walk away.

We make sure the economics work for the drivers and the restaurants.

So what’s the next city we can expect to see UberEats in?

For competitive reasons, we don’t discuss our rollout schedule.

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