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It’s food delivery app versus food delivery app.
It’s food delivery app versus food delivery app.

BusinessMarch 9, 2018

Head to head: Menulog vs UberEats

It’s food delivery app versus food delivery app.
It’s food delivery app versus food delivery app.

It’s food delivery app versus food delivery app as we pit the industry’s two main competitors in a head to head battle. Which one is fastest, cheapest and easiest to use? Jihee Junn weighs up the pros and cons of each one by doing what she does best – buying lunch.

Ordering in is the new eating out, and New Zealand is apparently one of the fastest growing markets out there. In fact, 6.7% is how much the New Zealand delivery market is set to grow by 2021 annually — more than double the growth of dine-in and pick-up. And when it comes to ordering via an app or website, 6 out of 10 Aucklanders are already said to have dabbled in the world of online ordering.

One of the most prominent food delivery services, UberEats, is celebrating one year in the New Zealand market this month, while its main competitor, Menulog, has been going at it for almost eight. The former says it’s partnered up with more than 700 restaurants in Auckland, Wellington, Christchurch and Hamilton, while the latter says it has 900 active restaurants on its platform across the whole of New Zealand.

UberEats delivers in all of Auckland’s major cities, most recently launching in Hamilton this week (supplied)

As the food delivery arm of Uber (aka the highly popular yet much-maligned San Francisco ridesharing business), UberEats works by making use of its parent company’s drivers. These drivers simply pick up the food and drop it off to the customer, just like they would with a passenger on the go. For the restaurant, delivery is entirely taken care of and all it needs to do is make the food. In part, it’s why UberEats charges a standard commission rate of 35% – because not only does it provide restaurants with platform and exposure, it handles all the logistics of delivery as well.

The relatively high rate hasn’t always gone down well with restaurant owners who already struggle with the realities of a highly competitive (and not very profitable) hospitality industry. Nicky Preston, communications lead for UberEats NZ, however, reasons that “service fees give restaurants access to a large network of delivery partners, contributes to 24/7 customer and operational support, app development and marketing campaigns.”

When it comes to the drivers, UberEats deliveries provide an additional opportunity for them to make money on their own schedule, allowing them to switch back and forth between driving passengers and delivering food. “Delivering with Uber Eats also creates new earning opportunities for those without a car but with an eligible bike or scooter, or those with cars that don’t qualify for other services on the Uber app but do qualify for Uber Eats,” says Preston.

Uber, which takes a 20-25% commission from drivers for its passenger rides, pays its workers slightly differently when working for UberEats. Preston says earnings are calculated in a way that’s tailored specifically for the service and are based on a calculation that includes a pick-up fee, drop-off fee and a distance multiplier. According to the Uber website for drivers, the pick-up fee is $3 per trip, the drop-off fee is $2 per trip, and distance is $1.60 per km. The site discloses that all advertised rates are before the 10% Uber service fee is applied.

ICYMI Jeff Goldblum became the new face of Menulog last year (don’t ask me why)

Menulog on the other hand, which is headquartered in Sydney and owned by British company Just Eat, operates quite differently. It charges a much lower commission rate of 14% — less than half of what UberEats charges — but costs are incurred elsewhere. Namely, from the restaurants having to undertake delivery themselves.

“We’re purely a one-sided platform. That’s our core business and our core focus,” says Paul Dodds, commercial director of Menulog NZ. “We don’t have our own drivers. We work with restaurants who do their own delivery instead.”

The main benefit of doing your own delivery, of course, is not having to rely on a third-party business (something which Burger Burger’s Mimi Gilmour cited as her main reason for not joining UberEats). The biggest downside is having to add one more thing to manage and think about, something which a lot of restaurants aren’t willing to do. Dodds, however, says this is starting to change.

“Traditionally, [restaurants that deliver] have been Indian, Thai, Italian restaurants and so forth. But more and more other kinds of restaurants are happy to do their own delivery nowadays, like burger joints,” he says. “If you’d asked me a year and a half ago [if relying on restaurants to do their own delivery was a limitation], I would have said yes. But nowadays, we have more and more conversations with restaurants who never even thought about doing delivery but now want to do delivery themselves.”

Menulog charges 14% commission as restaurants do their delivery. UberEats charges 35% but handles delivery for restaurants.

Some of us will have already tried Menulog, others will have tried UberEats. But few will have tried using both. So I decided to run a little test to help gauge how both services work in real life, racing them by placing two simultaneous orders to compare them on things like cost, time and ease of use.

For the sake of simplicity, I decided to exclude all other food delivery competitors from the test, such as local startups LazyAz and Deliveryeasy (the latter was also ruled out because their restaurants only delivered from 5:00 pm onwards). For the sake of fairness, I ordered from the same restaurant (Bona Pizzeria in Ponsonby) and requested one pizza and one pasta from each platform so that both drivers would have the same amount of food to wait for and carry. Lastly, I placed both orders at exactly the same time (1:00pm) with instructions for it to be delivered to The Spinoff’s CBD office.

The App

Since most people nowadays do everything on their phones, I decided to embody that spirit by ordering via the apps. Both were simple to navigate with intuitive UIs, although it helped that several menu items on the UberEats app included pictures, which is helpful if you’re ordering a food for the first time or can’t decide between two items.

UberEats also has the benefit of Uber’s existing technology, which means customers can track their orders on their phone from start to finish. Menulog is a bit more old school in this sense, sending you an email/text with the estimated time of arrival instead. This might not be as impressive, but it still does the trick (so long as the driver doesn’t get stuck in unexpected traffic).

Verdict: UberEats wins for a slightly better, more technologically-advanced app.

Left: UberEats / Right: Menulog

The Cost

Both orders consisted of two items each: a pizza ($14) and pasta ($19.50) totalling to $33.50. With UberEats, delivery was an additional $5.99 which is standard across all its restaurants and locations. For Menulog, delivery was $5, which meant the former cost $39.49 and the latter cost $38.50 — the latter being a mere dollar cheaper.

Both platforms, however, offer plenty of discounts. With UberEats, most new customers get $5 off their first order with a promo code and the company also regularly hands out discounts at events, although these only ever seem to apply to newcomers to the platform.

On Menulog, discounts vary from restaurant to restaurant, several of which offer 10%-20% off initial orders (this was the case with Bona Pizzeria, hence the cheaper total). There’s also a wide range of delivery fees on offer due to restaurants setting the price themselves, although Menulog’s commercial director adds that his company does advise restaurants on “optimum pricing” which rules: the cheaper the cheaper the better. Judging by what’s on offer, $5 seems to be the standard rate, but several others also offer to deliver for free if you spend over a certain amount.

Verdict: Menulog wins. It’s hard to say with all the different discounts, but if we’re going beyond what’s offered on the first order, Menulog’s restaurants seem to have the upper hand.

The Time

Having placed both orders at exactly 1:00 pm, the estimated arrival times were 1:35pm for Menulog and 1:39pm for UberEats. And you know what? Both arrived bang on time.

Verdict: Menulog (or more accurately Bona Pizzeria) wins for being four minutes early — but kudos to both for some serious punctuality.

Left: UberEats / Right: Menulog

The Delivery

Anyone who’s ever been to The Spinoff office knows that those three flights of stairs are hell on earth, so the fact that both drivers had trouble finding the place came as little surprise.

Even though neither managed to make it right outside the office door, I was still left impressed by how far they’d managed to get. Menulog/Bona Pizzeria’s delivery man made it all the way to our street entrance, but couldn’t seem to figure out where to go from there. UberEats’ delivery man made it even further — all the way up to the second floor — before calling me in a slightly confused state.

Verdict: UberEats wins. Although food for both orders arrived relatively warm and both drivers made it further than what I ever imagined, UberEats gets kudos for making it just that little bit further.

Concluding Remarks

Judging from a single test from a single restaurant, there isn’t a whole lot separating the two services. Menulog wins for time and price; UberEats wins for app and delivery. But in the grand scheme of things, these wins are all marginal.

The 35% UberEats takes from restaurants remains problematic, but the reality is that everyone who’s anyone in the restaurant industry right now is on there. It gives restaurants better exposure, more business and a higher chance of driving traffic back in-store. It’s why the selection on UberEats is so much more diverse than Menulog which, despite having expanded its range over the years, is still largely confined to serving Asian or Italian cuisines.

It’s true that more and more businesses are looking into doing delivery, but whether they’re actually willing to do it themselves as Menulog suggests remains to be seen. Ultimately, UberEats provides an easier way for eateries to get into the food delivery sphere. After all, it’s not just customers looking for convenience — it’s business owners too.

After just a year of being in New Zealand, UberEats has become the industry’s dominant force. But it’s clear that Menulog is determined to put up a fight, floating the idea of using Kiwi posties to deliver food and even enlisting The Coolest Man in Hollywood to randomly star in its ads. Competition is a good thing and smaller challengers like Delivereasy and LazyAz shouldn’t be discounted yet. But as FoodTaxi found out when it met its tragic fate last year, beware of the beast — it might just swallow you whole.

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