When Uber Eats dethroned Grubhub as the top food-delivery service in the US, the reversal was striking. In 2016, Eats controlled 5% of the US food-delivery market, while Grubhub held 70%, according to data compiled by Business of Apps. By 2019, when it took the lead, Eats had grown its share to 32%, while Grubhub's had collapsed to 20%.
Uber's reign, however, didn't last. DoorDash took the top spot in 2020 and built a commanding lead that will be difficult for Uber to overtake anytime soon, even though last year it bought Postmates, one of its primary competitors. In July of this year, DoorDash had 57% of the US food-delivery market, more than double Uber's 26% share, according to Bloomberg Second Measure.
The timing is inauspicious, as the pandemic has made delivery Uber's biggest source of revenue.
Seven current and former Uber employees told Insider the company lost its lead because it failed to match DoorDash's pace in adding new restaurants and features. (The current and former Uber employees were granted anonymity since they didn't receive permission to speak with Insider. Their identities are known to Insider.)
Though CEO Dara Khosrowshahi was warned about the trend before Eats slipped behind DoorDash, two former Uber execs said, he didn't prioritize the problem. "Lots and lots of alarm bells were raised to him," one of the former executives said. "His inaction led to severe erosion of market leadership."
While Eats has lost ground to DoorDash in the US under Khosrowshahi, the service has expanded quickly during his tenure and is larger than DoorDash internationally. Uber's delivery gross bookings — which measures the total value of delivery orders, excluding discounts and courier earnings — grew 110% in 2020 to $30 billion, after growing 87% in 2019. Eats is available in 32 countries, while DoorDash operates in four.
Khosrowshahi didn't respond to Insider's request for comment, but an Uber spokesperson told Insider, "In the US, we are laser-focused on increasing merchant selection and are seeing solid results with the addition of tens of thousands of new partners across restaurants, grocery, convenience, and other retailers."
But, Khosrowshahi said at a 2021 investor meeting, Uber isn't satisfied with second place in the US. DoorDash, according to six current and former Uber employees said, developed a domestic edge over Eats by building a larger selection of restaurants and focusing on suburban customers. Instead of limiting its selection to restaurants that expressed interest in appearing on its app, DoorDash added some without their knowledge (a tactic it has since abandoned). Uber didn't follow that strategy, and had a weaker selection of restaurants as a result, current and former employees said.
"I live in suburbia, and I would try to get my kids to use Uber Eats," a former executive told Insider. "There's no restaurants on it," the executive's children would reply.
DoorDash has also been quicker to launch new features, like a subscription service and the ability to place takeout orders. Uber has eventually matched those moves, but to some who have worked for the company, it has felt like Uber is reacting to DoorDash rather than thinking of ways to get ahead of its rival.
"It feels like we're copying a lot of what our competitors are doing as opposed to coming up with the ideas ourselves," a former Uber manager said in February, before they left the company.
Are you a current or former Uber employee? Do you have a news tip or opinion you'd like to share? Contact this reporter at mmatousek@insider.com, on Signal at 646-768-4712, or via his encrypted email address mmatousek@protonmail.com.
