Uber Eats now offers a dine-in option

By Megan Cerullo

/ MoneyWatch

Uber loses an average of 58 cents per ride

Uber Eats will now deliver food to customers in the most unexpected of places — restaurants. The food delivery and pick-up app's "Dine-in" feature is now being pilot-tested in Dallas, Austin, Tucson and San Diego after launching in select cities in November, according to Eater.

The service effectively eliminates the need for delivery drivers, with whom the tech startup has long had a contentious relationship. In its pre-IPO filing, Uber acknowledged that its business model would be adversely impacted if it were to classify drivers as employees, rather than contractors.

The feature allows more restaurants to join the platform, and it gives diners the opportunity to experience restaurants that don't offer takeout. "When you place an order through the Eats app and you go to the restaurant to collect it, you can then choose to sit in the restaurant to eat your food," Uber said in an FAQ.

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Diners aren't charged for the service. Instead, restaurants pay a fee that varies by market. Customers can tip restaurant employees through the app. The feature is designed to allow restaurants to focus on what they're best at — making great food and providing top-notch service to customers, an Uber spokesperson told CBS MoneyWatch.

It helps bring diners closer to restaurants they love — many of which they discover through delivery, the spokesperson also said. Uber is only testing the feature and doesn't yet have plans to roll it out on a larger scale.

"Drivers aren't necessary"

"It's another service that [Uber] can offer these restaurant owners — also customers — that's potentially a valuable service to them," Anand Sanwal, CEO of CB Insights, told CBS MoneyWatch. "Obviously, the drivers aren't necessary, but of course they might bring those people to the restaurants, and Uber could create more demand there."

Uber lost $3 billion in 2018 and $1 billion more in the first quarter of 2019. The company hopes cross-promoting Eats with its standard service will help stop the losses.

"It makes sense that they're trying to innovate on Eats and provide an offering that differentiates them from their competitors," Sanwal said. "It becomes a nice new arrow in the quiver."

First published on July 3, 2019 / 6:29 PM

© 2019 CBS Interactive Inc.. All Rights Reserved.

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