Point of sale system provider Toast announced Thursday that the company is expanding its partnership with Uber, making Uber Eats Direct the default white label delivery partner for businesses using Toast Delivery services.
Although not included in the official announcement, with this shift, Toast’s new default partner is switching from DoorDash Drive to Uber Direct, which will be an adjustment for many restaurant operators that use the service.
According to Toast, this change will allow operators to, “save on delivery fees, expand their delivery radius, and leverage Uber’s extensive delivery network,” building upon the Uber/Toast partnership that began in 2021.
“We are thrilled to expand our partnership with Uber and delighted to offer restaurants Uber Direct via Toast Delivery Services with fast and reliable local delivery support through our customers’ Toast-powered online ordering channels,” Kelly Esten, Toast chief marketing officer, said in a statement. “Partnering with Uber Direct will help restaurants maximize their margins with commission-free deliveries and reach more guests. We are excited to offer these new benefits to restaurants across the United States.”
Operators clarified with Nation’s Restaurant News that the base price for a standard delivery has now been lowered from $7.49 to $6.99 through Uber Eats, and operators have known about this change since the end of October.
Toast claims that this change not only lowers fees but also expands the delivery radius, though the company’s Frequently Asked Questions on its website state that Uber Direct’s delivery radius is eight miles, while DoorDash Drive’s delivery radius is 10 miles, so the radius would actually be smaller.
While some operators were allegedly led to believe that Toast would be completely shifting its delivery provider from DoorDash to Uber Eats, Nation’s Restaurant News received separate confirmation that Toast customers will now have a choice between the two delivery providers, and DoorDash won’t be going away from the platform.
“Merchants who currently use DoorDash Drive On-Demand through Toast Delivery Services can opt-in and stay on Drive On-Demand, and future merchants will have the option to choose between DoorDash and Uber,” a representative with DoorDash said. “This impacts only a subset of merchants using Toast Delivery Services to fulfill orders from their own websites. It will not impact orders placed on DoorDash Marketplace.”
Restaurant operators have varying opinions on this change in default delivery provider. One operator in Arizona told Toast that he is already seeing positive results from this partnership expansion.
“Uber Direct for Toast Delivery Services has been a great addition to our delivery platform. It allows customers to order through our website, keeps delivery prices down, and offers speedy convenient service. We love the seamless integration,” Brian Terpay, chief operating officer of Over Easy, a 16-unit breakfast concept in Arizona, said.
However, not all operators are happy with the change. Mike Bausch, owner of Andolinis Worldwide, DoorDash merchant, and member of the Toast Consumer Advisory Board, sent an email to Toast about the “significant operational challenges” this change will cause. Bausch said that he only heard secondhand from a fellow operator that Toast would be switching from DoorDash to Uber, and is relieved to hear that operators will still have a choice.
“Uber’s model may work well in Tier 1 cities, but in Tier 2 and Tier 3 markets like San Antonio, Nashville, and Tulsa, they lack the infrastructure and presence to adequately meet demand,” Bausch’s email to Toast said. “Their drivers, primarily focused on rideshare, often aren’t as engaged in food delivery, and their logistics fall short of what DoorDash has established, especially when issues arise. Additionally, Uber’s reporting practices have long been a concern for transparency and reliability; even with a Toast at the helm, tracking down orders with two platforms now renders Toast problematic instead of a solution-based model.”
Bausch said that he will opt to continue using DoorDash Drive through Toast once he is able to make that change.
Before this change, Nation’s Restaurant News dubbed DoorDash the “clear winner” of the third-party delivery provider wars, as the company owns 67% of the market share with Uber Eats in a distant second place. According to recent mystery shopper data from Intouch Insight, DoorDash outperformed its competitors in many categories, particularly delivery time and overall satisfaction.
However, it is possible that DoorDash’s runaway dominance might change after Toast — one of the industry’s largest POS providers — changed its default delivery partner to Uber Eats Direct.
Industry insiders speculate whether this might be a response to DoorDash investing more in software solutions, and a sign that Toast might now see DoorDash as more of a competitor than a delivery partner.
For example, last month, around the same time that operators received word of the newly expanded Toast/Uber Eats partnership, both Toast and DoorDash released similar tools for operators to be able to launch their own mobile apps. Toast declined to comment further on the specifics of this change.
Contact Joanna at [email protected]
