Uber Eats Drives Growth for Domino's, Expands to Canada
New delivery legislation, Q1 profits diverge for fast fooders, Gogoro charges up
Today is such a big news day that we’re afraid you’re going to have an awful lot of links to click! Besides our must-read analysis of Uber Eats + Domino’s, new laws in the pipeline, fast food profitability and EV battery upstarts, you should probably also bone up on Getir getting out of every country except for Turkey, although in the U.S. it will continue to operate its recently purchased subsidiary FreshDirect.
Today:
Uber Eats Delivers Results for Domino’s
New Legislation May Bite Delivery
Chart Time | Q1 Profits Diverge
Battery Swapping Charges Up Scooters & Mopeds
3PD | Uber Eats Pushes New Customers to Domino’s
Pizza giant Domino’s is feeling hot, hot, hot for its partner Uber Eats, as revealed in the company’s recent Q1 financial results. “Our launch into the aggregator space remains on track to exit the year as 3% or more of sales coming through Uber Eats,” said Domino’s CEO Russell Weiner. “We’re seeing a higher percentage of single user transactions on Uber than we've seen on our own channel. Further this channel is becoming more promotion-driven. Customer responses to deals are stronger than everyday low price. As a result, we are continuing to work to fine tune our marketing and our offers to ensure that we are effectively driving this channel.” Domino’s also noted it was seeing a better mix of carryout and delivery via UE in Q1 than the previous quarter, and that it was also seeing gains from its revamped loyalty program.
The Big Picture: This Uber Eats partnership helped drive a stellar Q1 for Domino’s with net income up 20% to $126 million and revenue up 5.9% to $1.08B. U.S. same store sales were up 5.6%, while overseas saw more modest 0.9% growth (excluding f/x impact.) Domino’s is so pleased with its Uber Eats tie-up that it’s taking the partnership overseas… all the way to Canada! Starting with 260 stores in Ontario before going nationwide by EOM, UE will be the exclusive 3PD to list the pizza-maker, while Domino’s existing staff will handle the actual delivery logistics.
POLICY | CA Bill to Limit 3PD Pricing Moves Ahead
SB 1490, proposed legislation in California that would impact the delivery space, is moving forward in the state legislature, as it passed through the Business, Professions, & Economic Development Committee as well as the Judiciary Committee. Next it heads to the full senate for a vote. The DRA-backed bill would:
Require itemized breakdowns of transactions, including purchase price, fees/commissions charged to the resto, fees charged to the customer and tips
Disclose fees charged by a 3PD including specific rates for marketing, delivery and order processing
Ban delivery platforms from limiting the value or number of transactions a merchant can dispute
Prohibit 3PDs from penalizing a merchant for not using a service offered by the platform
Necessitate disclosure of order status to the merchant and customer including delivery method, anticipated delivery time and confirmation of delivery
Require a mechanism for removing a merchant from a food delivery platform
The Big Picture: Legislatures across the country seem to be coming for the delivery space, once again, with Minnesota also working on a bill that would require 3PDs to disclose all additional fees and itemized costs. On the national level, execs are still recovering from the grilling they received from Senators Warren, Casey and Lujan. Things look pretty similar the world over, as Singapore has introduced a new law to provide gig workers with retirement benefits and work-related injury protections.
CHART TIME | Net Income Diverges at Major Fast Fooders
We’ve got more Q1 financial results rolling in, and the results are as inconsistent as a sandwich made at a ghost kitchen... Burger King-parent Restaurant Brands International saw net income spike 18.4% to $328M, as its modernization and takeover of struggling franchisees shows promise. Fellow burger slanger Mickey D’s grew slower, with net income up to $1.93B, as cost-conscious shoppers look for cheaper alternatives. Yum! Brands, parent co of KFC, Pizza Hut, Taco Bell and The Habit, hit an impressive milestone: digital sales grew 11% YoY to achieve a record 55% of the sales mix. Despite that, net income was up a more modest 4.6% to $3.14M, with Pizza Hut sales down bigly. Starbucks also got scalded, as net income fell 20.5% to $772.4M, with new menu items like lavender lattes apparently failing to bring in customers.
ELECTRIFICATION | Battery Swapping Scooters Take Off Worldwide
Taiwanese moped maker Gogoro introduced its cheapest e-scooter yet, the $760 (post-government subsidies) Jego, and has quickly achieved an impressive 6,500 fully-paid preorders. This price point is bringing new riders into its ecosystem, with one in four purchasers being new to EVs; this is particularly meaningful to cash-strapped couriers, who are able to transition to cleaner and safer mobility options thanks to Gogoro’s pricing. Gogoro is headed to more markets worldwide, as it ties up with Nebula Energy in Nepal and Sumitomo in Japan.
The Big Picture: The key to Gogoro’s economics is its swappable battery system, whereby users commit to a monthly plan that covers a set number of miles worth of recharging, starting at $7/mo and up. Not only does that amortize the hardware cost for cash-strapped riders, it means drivers never have to worry about running out of juice, nor do they need to lug their batteries into an apartment building to recharge. This innovative model has seen a number of copycats, like Vammo, which is expanding across Brazil as it find traction with both commuters and couriers. The EV charging scene is looking a bit less rosy stateside, as Tesla just laid off its entire Supercharger team. While a Model S might not be a great fit for delivery workers, the axed staff also included those responsible for integrating Tesla’s battery tech with other OEMs, including affordable options from the likes of Nissan, Hyundai and Chevy.
A Few Good Links
Meituan to launch KeeTa food delivery service in Saudi Arabia. Chowdeck raises $2.5M for delivery in Nigeria. Rite Aid launches booze delivery on Uber Eats. Uber for Business offers new tool for executive assistants; company partners with Int’l Transport Workers’ Federation to improve courier health and safety. DoorDash pushes flowers for mom, Grubhub notes grants to LGBTQ+ community, Shipt highlights pet care products. Chipotle axes Farmesa concept in wake of Kitchen United’s collapse. The Save Mart Companies double down on Instacart partnership, add Caper Carts, FoodStorm, Storefront Pro. Per-delivery order consolidation drives margin improvements at Amazon. Wow Bao launches new Lunchbox-powered app. Sales flat at Brinker. Deliveroo packages up marathon-related promo items with Boots. Walmart expands Wing drone partnership; MightyFly develops mega-sized EVTOL.
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