3 Things McDonald’s will Gain Through Its Tie-Up with UberEATS

McDonald’s will be now be delivering its Big Mac and fries through 1,000 restaurants across the US. The restaurant chain earlier opened to delivery service with only 200 restaurants. Now, after generating $1 billion in profits, the company is looking forward to food delivery in other cities too. It has tied-up with UberEATS, a third-party food delivery service. Here are three things that McDonald’s will gain through the partnership.

McDonald's Corporation NYSE: MCD
London, UK – May 5, 2011: Sign with McDonald’s logo over their restaurant in London.

More Revenue

 

McDonald’s already has a good delivery network in Middle-East and Asia. Some of the restaurants get 40 percent of their sales numbers from deliveries alone. The same can be modeled in the US as well. As part of the tie-up, McDonald’s will be creating more delivery networks and gathering more revenue. It has increased its restaurants available for delivery by 5 times, going from 200 to 1000. The global revenue for the company from deliveries alone is $1 billion. With more delivery options, the company expects bigger revenue.

Cost Advantage for McDonald’s

 

With a restaurant chain the size of McDonald’s, it could be difficult to manage an army of delivery men. However, UberEATS solves that problem for McDonald’s. This third-party delivery service provides a huge cost advantage to the company. The company doesn’t have to work on a new delivery service of its own; it is saved from incurring humongous costs and is still able to provide delivery services in select locations. The chain doesn’t have to manage a fleet of drivers, their vehicles etc. They could simply get the customer’s orders packed like usual and the third-party services take care of the rest.

An Edge over Competition

 

Pizza chains have already been one of the biggest receivers of the fast food dollars, simply because of delivery options. McDonald’s wants to tackle its competition and get an edge over them. Wendy’s and Burger King have their own delivery networks, even though they have their own restrictions. Taco Bell has a small delivery network too. In fact, Wendy’s is moving towards installing 1,000 self-order kiosks. Therefore, the golden arches are prepping for stiff competition.

Now, it has 248 delivery ready restaurants in Miami and Orland. There are 144 such restaurants in Phoenix, 267 in Chicago and 59 in Columbus. 300 restaurants are serving the Los Angeles area alone. The restaurant may further expand its presence in these areas and include other locations too.

There is no doubt that UberEATS will be a fruitful association for McDonald’s. Customers will also get their fries home delivered, which could increase McDonald’s presence in the market.