Holmes Institute: Uber Eats Impact on Business Sales (HC3131)

This report examines the impact of Uber Eats on business sales, focusing on the Australian market. It begins with a literature review exploring the benefits of Uber Eats, business innovations, and diversification. The report presents a conceptual framework and provides an overview of Uber's operation...Read More

Business sales
New business opportunities
Business diversification
Technology
Customer relationships
Thesis statement: “Uber Eats and how will it contribute to the increase of business sales.”
Chapter 2: Literature review
2.0 Overview
In this section, previous literatures regarding business sales have been reviewed that
allowed comparing and contrasting the views and opinions of different authors. This provided an
opportunity to develop an in-depth study with better understanding and in-sight regarding the
topic. In studying the benefits of Uber Eats, business innovations and business diversification has
also been studied that helped in determining the relationship with business sales maximization.
2.1 Conceptual framework
Figure 1: Conceptual framework
(Source: Created by Author)

2.2 Uber
Uber is an American multinational transportation network company that offers wide
range of services such as peer-to-peer ridesharing, bicycle sharing system and ride service
hailing. The company was founded in March 2009 in San Francisco and is currently operating in
785 metropolitan cities worldwide. Uber can be accessed by through websites and mobile
applications (Rogers 2015).
Figure 2: Uber World Map
(Source: Cramer and Krueger 2016)
The aforementioned image indicates that Uber is accessible around the world and the ride
sharing mobile app connects riders with drivers in just minutes and couple of clicks. The
business model used by Uber is pretty simple and is convenient ad highly affordable to get
around compared to traditional taxi cabs. The global market value of Uber is $72 billion since
the origin of the company. In the most recent quarter, it has been seen that Uber has generated
$12 billion in gross bookings (Cramer and Krueger 2016).

Figure 3: Number of rides by Uber
(Source: Chen, Mislove abd Wilson 2015)
From the above figure, it can be seen that the company has successfully completed 5
billion rides with over 3 million people driving for it. An average earning of an Uber driver is
$364 per month and it is estimated that 40 million rides per month is fulfilled by Uber. Uber has
established them as a prominent figure in sharing economy that has changed the face of the taxi
industry, as this provided various facilities to the riders compared to traditional taxi cabs.
Currently, an estimated 22,263 employees is working for Uber at the global platform (Chen,
Mislove abd Wilson 2015).

Figure 4: Competitors of Uber
(Source: Wallsten 2015)
Both the images presented above indicates that Uber has gained huge popularity
compared to traditional taxi cabs and others business organization with similar business models.
Therefore, it can be seen that Uber is still leading the pack of the ridesharing market and the
company is no way near pulling brakes around the world. Uber is growing continuously and
consistently growing and successfully outsmarting the competitors (Wallsten 2015).
2.3 Emergence of Uber Eats
After securing the feet in ride sharing app, Uber have ventured into the food delivery
business sector that led to the emergence and development of Uber Eats that has also been an
undeniable success. Uber Eats has been launched in 2014 that provided an opportunity for the
users to order foods from the local restaurants. By 2017 April, Uber Eats have partnered with
more than 46,000 restaurants around globally. Uber Eats service is available across 250 cities
around the globe. Reports suggest that the current bookings run rate for the application is $6
billion, as per May 2018 (Stonehem 2016).

Australia is one of the food capitals in the world that signifies that Australian population
like food and the restaurants pride themselves in serving food to the customers. Therefore, it can
be said that the launch of Uber Eats is successfully the landscape of the food scene of Australia.
Uber Eats is succeeding in Sydney in Australia because the demands of the popular restaurants
are high. The sentiments of the consumers are highly embedded in the lifestyle and culture of the
Australian population. However, the ability to fulfill the demand of the restaurants is lower
because of decreased number of tables and sitting facilities in the popular restaurants across
Sydney (Henama and Sifolo 2017). The restaurants have limited ability to physically fit the
customers and only finite number of customers can be served. This has created a huge market
opportunity for Uber Eats in Sydney because there is an excessive demand of popular restaurants
that cannot be met by them. Uber Eats in this case acts as a mediator between the hungry
individuals of Sydney and the fully booked restaurants. Uber Eats increases the food supply from
the most popular restaurants of Sydney by getting rid of barriers to food consumption. The
hungry consumers do not have to go out, wait in the queue and physically present for eating the
food of their favorite restaurants. Uber Eats allows customers to the get the food they love
delivered at their doorsteps at Uber speed (Sanders and Pattison 2016). The population of
Australia, specifically Sydney has taken the on-demand service of Uber Eats positively because
the hungry people across Sydney are fed faster than before and they are even able to enjoy and
relish the food from their favorite restaurant without being physically present (Das, Bhatt and
Path 2017).
2.4 Concept of business sales
Sales are one of the crucial aspects that business organizations should emphasize because
the ultimate goal is to ensure increased sales. According to Niedermeier, Wang and Zhang

(2016), sales are defined as the set of activities related to selling a specific product or service to
the customers within a specific period of time. However, as argued by Coibion, Gorodnichenko
and Hong (2015), the concept of sales indicates exchanging of commodities for money between
buyers and sellers. Increased business sales are one of the greatest competitive advantages that
business organizations can rely on because this highlights the ability to capitalize the economies
of scale. It is necessary for business organizations to identify new business opportunities, trends,
needs and requirements of the target audiences and host countries in order to contribute towards
increased business sales and Uber Eats has done nothing different in Sydney, Australia.
Uber Eats have identified a new business opportunity in Sydney, Australia that is created
due to the failure of the well-known restaurants to fulfill the needs of the hungry customers of
serving food at the restaurants. Uber Eats in this case acts as a mediator between the hungry
individuals of Sydney and the fully booked restaurants. Uber Eats increases the food supply from
the most popular restaurants of Sydney by getting rid of barriers to food consumption. The
hungry consumers do not have to go out, wait in the queue and physically present for eating the
food of their favorite restaurants. Uber Eats allows customers to the get the food they love
delivered at their doorsteps at Uber speed (Chen, Mislove abd Wilson 2015).
2.5 Factors increasing business sales
There are different factors that affect the sales of the business and business organizations
need to identify the opportunities successfully for ensuring increased business sales. The
different factors contributing increased business sales are new market opportunities, technology,
business diversification and customer relationships.
Identifying new market opportunities

The business organizations irrespective of the business sector have several competitors
those offer more or less similar products and services. This results in market saturation because
the customers have adequate alternatives for fulfilling their needs and demands. Therefore, after
a certain period, the sales of the business organizations become stagnant thereby, threatening the
position of the business organizations. As commented by Krotov (2017), change is the only
constant thing for the customers and business organizations should be wise and capable enough
of recognizing the needs and incorporate them into successful business ideas. As mentioned by
Bocken and Short (2016), the changing needs and demands of the customers leads to new
business opportunities that business organizations should identify for making it large in terms of
sales. However, as argued by Karimi et al. (2016), only identifying new business opportunity is
not sufficient, as the idea should be practical and feasible to generate adequate results for the
business organizations.
The launch of Uber Eats is one such practical and feasible new business opportunity
identified by Uber that led to the venture of the company in the food delivery sector from being a
successful ride-sharing cab facility. The restaurants have limited ability to physically fit the
customers and only finite number of customers can be served. This has created a huge market
opportunity for Uber Eats in Sydney because there is an excessive demand of popular restaurants
that cannot be met by them. Uber Eats in this case acts as a mediator between the hungry
individuals of Sydney and the fully booked restaurants. Uber Eats increases the food supply from
the most popular restaurants of Sydney by getting rid of barriers to food consumption. The
hungry consumers do not have to go out, wait in the queue and physically present for eating the
food of their favorite restaurants. Uber Eats allows customers to the get the food they love
delivered at their doorsteps at Uber speed (Wallsten 2015).

Technology
Technology is changing the entire sales game and this advanced era of science and
technology are offering new tools, tips and trends for creating and consolidating new marketing
strategy. According to Agnihotri et al. (2016), using technology bridges the gap between the
business organizations and the target audiences successfully. Majority of the population around
the world have access to latest technologies, smart phones and internet and WiFi facilities.
Increased use of smart phones is an advantage that business organizations can use for increasing
the sales. In spite of attracting the customers, technology can be used for attracting the customers
and contributing towards increased business sales. However, as argued by Guesalaga (2016),
using technology for increasing business sales is only possible for metropolitan cities where the
populations have access to advanced technologies and have the knowledge to use technology.
Similar is the case of Uber Eats that have used technology for bridging the gap between
the hungry consumers and well-known restaurants across Sydney in Australia. Uber Eats is
accessible in mobile application where the hungry consumers are connected with the local
restaurants in Sydney. The population of Australia, specifically Sydney has taken the on-demand
service of Uber Eats positively because the hungry people across Sydney are fed faster than
before and they are even able to enjoy and relish the food from their favorite restaurant without
being physically present (Rogers 2015).
Business diversification
Business diversification is one of the crucial aspects that business organizations should
emphasizes on for keeping their position secured in the business sector. Business diversification
offers and opens new branches and opportunities for the business organizations in accordance

with the needs and demands of the target customers. As commented by Curi, Lozano-Vivas and
Zelenyuk (2015), business diversification provides an opportunity for the business organizations
to minimize the risk of loss. Therefore, if one investment fails to perform well for the company,
another business idea might work thereby, reducing the chances of loss of investment. However,
as argued by Prokhorova et al. (2016), successful business organizations can also highlight
diversification because their existing market position helps in attracting new customers as well as
retaining new customers by offering them something new.
Similar is the case of Uber Eats where Uber diversified their services into food delivery
system from being a successful and leading ride-sharing taxi cab service. Uber has been one of
the successful ride-sharing cab facilities across the world that operates in more than 800
countries and has completed an estimated 5 billion rides. Service diversification of Uber and
launching Uber Eats was hugely successful because the customers were already aware and
satisfied with the service efficiency provided by the company. The past history of the taxi cab
facility also made Uber Eats successful in Sydney, Australia because this service mitigated the
gap between the hungry customers and the well-known restaurants (Cramer and Krueger 2016).
Customer relationships
Customers are the key external stakeholders that determine the success and sales of the
business organizations. It is necessary for the business organizations to develop strategies and
offer products and services that help in establishing positive relationship with the target
audiences. As mentioned by Shi (2016), as the customers feel satisfied with the services provided
to them, they tend to come back to the organizations in the future regardless of the alternatives
available in the market. Positive customer relationships help in building loyal and satisfied

customers that contributes towards increased business sales. As a result, business organizations
are able to count on the return on investment and ensure increased sales. However, as argued by
Murali, Pugazhendhi and Muralidharan (2016), apart from coming back, positive relationship
with customers also help in increasing sales by attracting new customers. As the existing
customers spread positive word-of mouth, it helps in attracting new customers thereby,
increasing the business sales successfully.
Similar is the case of Uber Eats where positive relationship with the customers helped in
increasing business sales. The Australian population was already satisfied with the Uber ride-
sharing cab facilities that led to the development of positive vibes about Uber Eats in Sydney.
The population of Australia, specifically Sydney has taken the on-demand service of Uber Eats
positively because the hungry people across Sydney are fed faster than before and they are even
able to enjoy and relish the food from their favorite restaurant without being physically present
(Wallsten 2015).
2.6 Reason for restaurants to adopt Uber Eats
Restaurants in Sydney should partner with Uber Eats due to the undeniable benefits it has
to offers both for the restaurants and the customers. As mentioned by Roberts (2016), one of the
reason of partnering with Uber Eats is conquering new customers. Food delivery system ensures
more customers that lead to increased revenue and profits. Therefore, partnering with Uber Eats
provides a smart opportunity of increasing the reach without investing in actual physical
expansion. However, as argued by Das, Bhatt and Path (2017), partnering with food delivery
service provides an opportunity to give the customers taste of what is about to come or to be
served. Similar is the case of Uber Eats, where it entices the customers to come to the premises
by putting a teaser of the food offering on a special delivery menu. This helps in increasing

premium and seasonal ingredients thereby, influencing the customers to pay more thereby,
increasing the business sales for Uber Eats.
Additionally, Uber Eats have delivery rate that attracts new customers successfully. As
the local restaurants are visible to the population through mobile applications, partnering with
Uber Eats provides increased recognition for the restaurants. As the customers do not have to pay
delivery fees, they develop increased liking for the restaurants and generating new customer
base. This act as a major contributor for the restaurants in Sydney thereby, increasing business
sales successfully (Wright 2018).
2.7 Benefits of Uber Eats
Sydney is crowded with well-known restaurants that have limited physical facilities that
restrict the ability of the restaurants to feed finite number of customers. Therefore, partnering
with Uber Eats will be highly beneficial for the restaurants in Sydney, Australia. As Uber Eats is
the top delivery app in the world including Australia, the restaurants will encounter increased
customers. Additionally, partnering with Uber Eats is beneficial because the restaurants will be
able to find local and regular customers that will increase the sales of the business (Sharma and
Waheed 2018). However, on the contrary, restaurants will be able to ensure continuous growth
and innovations for their business. This is because Uber Eats believe in growing business with
ready-made technology at the fingertips. Therefore, constant and consistent improvement
technological improvements by Uber Eats will also help the restaurants across Sydney to ensure
continuous and consistent improvement (Leckie, Nyadzayo and Johnson 2018).
On the other hand, it must be kept in mind that technology never sleeps and Uber Eats is
a technology driven mobile application. Uber Eats provide food delivery service 24/7 thereby,

allowing the hungry customers to have access to food regardless of their time. Though some
restaurants across Sydney does not operate 24/7 but Uber Eats helps in findings restaurants
operating 24/7 thereby, generating customer influx and increased profits for the restaurants
successfully (Gera et al. 2018).
2.8 Uber Eats and its impact on business sales
Uber Eats provides a positive impact on the business sales of the well-known restaurants
across Sydney. Uber Eats provides an opportunity for the hungry customers connect with well-
known local restaurants. As a result, both the restaurants and the customers are highly benefitted.
The restaurants get sales whereas the hungry customers are fed timely and with quality (Jamil
and Noiseux 2018). The restaurants are highly benefitted in terms of sales because they are able
to sell foods both to in-house customers and to the customers at their homes. The restaurants do
not have to send back customers hungry and unsatisfied due to lack of space of dining inside the
restaurant. As a result, the sales of the restaurants increase manifolds, as foods are delivered and
sold using Uber Eats successfully (Basso et al. 2018).
2.10 Research gap
The previous researches conducted have failed to address the impact of business
diversification and its contribution in increasing business sales both positively and negatively. In
this research, this research gap has been identified based on which the research will be
undertaken for achieving the research questions. As known, Uber Technologies Inc is an
American multinational transportation network company so its diversification into food delivery
business and its contribution in increasing business sales in studied and answered by undertaking
the research.

2.11 Summary
Therefore, in this section, it can be said that previous literatures and various internet
facilities have been reviewed that helped in understanding the transition of Uber from taxi
business to food delivery business in Sydney, Australia. Reviewing and critically analyzing the
mind set of different authors helped in developing quality and authentic data that can be used for
future researchers. Business sector in Sydney is highly competitive that led to the emergence of
Uber Eats thereby, highlighting business sales. Considering the demand of food delivery at home
among the population in Sydney, the contribution of Uber Eats on increasing business sales is
analyzed successfully.

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