McDonald’s SG and UberEATS join forces: Future of McD's delivery uncertain?

McDonald’s Singapore and UberEATS have joined forces to allow customers the “convenience of having a McDonald’s meal delivered to their doorstep via UberEATS”.

“We are excited to introduce a new level of customer convenience by partnering with UberEATS, having been in the delivery business for 15 years,” said Kenneth Chan, managing director, McDonald’s Singapore. “The ease of the UberEATS app will complement our existing 24-hour McDelivery platform, and provide our customers greater accessibility to their favourite McDonald’s food delivered right to their doorstep.”

“In today’s collaborative economy, we aim to expand McDonald’s restaurant footprint with the combined convenience of McDelivery and UberEATS, and broaden our delivery capacity to connect with our customers anywhere and anytime of the day,” added Chan.

McDonald’s Singapore first launched the McDelivery service in 2002, and was the first quick service restaurant to launch a 24/7 delivery service in Singapore in 2005. The McDelivery business has since grown from strength to strength and is a significant growth driver of the overall business, the press statement read.

“With UberEATS, you can get the food you want, where you want it, delivered at Uber speed. We're thrilled to partner with McDonald's to give fans in Singapore easy access to their McDonald’s favourites at the tap of a button," said Shri Chakravarthy Gopalakrishnan, general manager, Singapore & Malaysia, UberEATS. “In our efforts to continuously add more variety and choices for our customers, we're excited to expand our reach and deliver what they've been craving.”

To meet increasing customer demand for door-to-door delivery, McDonald’s and UberEATS began piloting the delivery service in the Central Business District and Jurong East area in August 2017. Starting today, customers will be able to place orders for their favourite McDonald’s food via UberEATS currently available at close to 60 restaurants and will be expanded across even more restaurants islandwide by end of the year.

Customers can place McDonald’s orders on the UberEATS mobile app or on, using the same account they use to take Uber rides and track their order, as an UberEATS delivery partner brings their meal directly to them. An UberEATS booking fee applies to each order.

Industry speak

According to Prantik Mazumdar, co-founder of Happy Marketer, if McDonalds gets into a long term strategic partnership with UberEATs it would make sense for the platform to have a data sharing clause as part of the alliance else it may not be a win-win partnership for both parties.

He added whilst relying on a partner such as UberEATs for the last mile delivery could help McDonalds cut costs in the short run, it will prevent it from capturing data about their customer's preferences and behaviour, which can be priceless in the long run.

“I have been a big fan of the omni-channel experience McDelivery offers and their efficient delivery network and on the contrary I haven't had great experiences with UberEATS yet. [...] So unless McDonalds is looking to scale down its delivery business and focus on its core QSR business, I am not sure of the commercial value here. From a customer's point of view, given my pleasant experiences with McDelivery for a long time, I will remain a tad bit sceptical until UberEATS proves its worth to me,” Mazumdar said, adding that if this partnership takes off and serves McDonald's well, rightfully someone will question the existence of McDelivery as a duplicate platform.

In a conversation with Marketing, Sridhar Gadhiraju, data strategy director, DigitasLBi, said McDonald’s partnership with UberEATS is a good idea due to potential cost savings for customers. This would allow McDonald’s to serve its customers without imposing extra charges or minimum order values.

“Where this gets interesting is the delivery period of each. UberEATS runs from 8am - 11pm whereas McDonalds is almost 24 hours. By partnering with UberEATS McDonalds can ensure a smooth flow of orders by sharing delivery during peak hours without investing in further delivery drivers or costs,” Gadhiraju said.

The partnership will also allow McDonald’s to gain a new pool of occasional customers. Gadhiraju  added that this is a good acquisition strategy to attract customers who have not downloaded the McDonalds delivery app but instead use UberEATS.

“This opportunity could provide a great platform for McDonalds to acquire, nurture and grow new customers,” Gadhiraju said, echoing the sentiment of Mazumdar. Meanwhile, UberEATS has now provided customers another choice of restaurants and added a new revenue source, he added.

Also weighing in was Rika Sharma, managing partner, group head of Social@Ogilvy Singapore. She added that McDonalds might see a drop in the number of people using their own ordering platform. However, exposure on UBEREATS should bring in a higher overall volume of orders.

“Its own delivery system should definitely be retained in the short term, but must be re-evaluated once they have clear results on the partnership’s business impact,” Sharma explained. As such, the new partnership enables McDonalds to reach a wider audience and make the most of UberEATS’s growth in the country.