Uber Eats has removed thousands of online-only brands from its app in an effort to declutter the platform. The move comes amid concerns that the presence of multiple delivery options with different names but the same menu is creating confusion for diners. During the pandemic, virtual brands emerged as a lifeline for restaurants by enabling them to test new ideas and recoup lost sales.
As a result, the number of virtual brands on Uber Eats quadrupled to more than 40,000 in 2022 from over 10,000 the previous year. While such brands account for 8% of Uber Eats’ storefronts listed in the U.S. and Canada, they represent less than 2% of bookings in the region.
According to John Mullenholz, who oversees the business at Uber Eats, the explosion of online storefronts created a “Wild West, anything goes kind of situation,” with diners effectively seeing “12 versions of the same menu”.
To address this issue, Uber Eats has planned to remove 5,000 online storefronts, covering around 13% of virtual brands in North America. While the cuts will target many online-only brands with duplicate menus, the parent restaurants will remain on the app. Uber Eats declined to share names.
The cuts come as Grubhub and DoorDash have also unveiled new guidelines aimed at virtual restaurants. Uber Eats, for example, will require that more than half of a virtual brand’s menu differs from its parent restaurant and any other brands from the same kitchen. It will also require online brands to list photos of five items that are unique to its menu.
Additionally, Uber Eats will take down virtual restaurants whose average ratings drop below 4.3 out of 5 stars, a higher bar than physical restaurants.
Large chains such as Chili’s, Denny’s , and IHOP have used virtual brands to target new segments of diners and lift sales at non-peak hours. They are not the target of Uber Eats’ cuts as their online-only brands have differentiated menus. However, earlier this month, IHOP started a third virtual brand called TenderFix, serving chicken sandwiches and tenders.
While virtual brands have proved useful to many restaurants, their rise has created challenges for delivery platforms, which have struggled to keep up with the industry’s rapid changes.