Bringing The Magic of Uber to Packaged Meals

UBER EATS

Helping Uber’s users go anywhere and get anything

How do people eat?

CONTEXT

In today's world, people eat in various ways, ranging from less convenient to more convenient options. Some people cook unprepared foods while others prefer prepared foods that are ready to eat. Uber Eats has already developed solutions for three main categories of eating options:

  1. On-demand restaurant delivery

  2. Eating out / ordering pickup

  3. Online grocery delivery

In this case study, I aimed to answer whether or not Uber Eats should build a solution for a 4th way of eating: Packaged Meals.

If Uber Eats offers Packaged Meal delivery, then they will increase retention amongst their user base.

HYPOTHESIS

Where is the packaged meal (Heat & Eat) market headed?

THE MARKET

The Heat & Eat meal kit market in the U.S. has an expected compounded annual growth rate of 17.8%, higher than the online food delivery market’s expected CAGR of 10.4%.

What Heat & Eat companies exist?

Who are the users driving this growth?

THE AUDIENCE

In general, there are a lot of similarities between Uber Eats users and users who order packaged meals (like Freshly).

Uber Eats Users

Ages: 54% are Millennials or Gen X

Attitudes: 60% of users order delivery to avoid shopping for & preparing meals

Personas:
- Busy professionals (single, couples)
- Parents
- Elderly
- College students
- Travelers
- Businesses/teams

Packaged Meal Users*

Ages: 64% are Millennials or Gen X

Attitudes: 65% of users seek quick & easy meal solutions

Personas:
- Busy professionals (single, couples)
- Parents
- Elderly
- College students
- Travelers

Sources: 1. Statista, 2. Numerator Insights, 3. Uber Eats Harris Poll

*Assumption: demographic data is similar between Cook & Eat and Heat & Eat segments.

What are the pain points that these users need addressed?

USER INSIGHTS

Users seek cost-effective meal options

Users are looking for food options that won’t breaking the bank, especially in 2022. If a user in NYC wanted to order 6 meals for the week, it could cost them $105-$135 including tip (Avg. $20/meal).

Packaged Meal services like Freshly cost an average of $13 after shipping (Avg $7 savings/meal).

Users search for healthy meal options

Over time, more and more people are trying to eat healthier. 80%+ of users don’t feel like they eat healthier when they get food delivered compared to when they cook.

81% of people believe Meal Kits are healthier than prepared food from grocery stores.

Users want more convenience

Millennials exhibit a strong preference for convenience, spending the least amount of time preparing food compared to other generations. 66% of Millennials reported buying prepared food within 7 days prior.

A batch of Packaged Meals typically takes 2-3 minutes to heat up and can last 5-7 days in the refrigerator.

How do these user groups order food?

USER JOURNEY

In general, the ordering process is very similar between Uber Eats and Packaged Meal services like Freshly.

The main difference is the time it takes for the food to arrive.

Since Uber Eats is a marketplace, we should consider how Packaged Meals could affect other user groups.

THE MARKETPLACE

Packaged Meal Brands

Advantages

  • Lower CAC

  • Increased revenue from new distribution channel

  • Potential cost savings through Uber’s delivery network and infrastructure

Risks / disadvantages

  • Technical integration with Uber Eats

  • Smaller margins for new users who may have joined in other ways

  • Lower ARPU (users may split meals between Restaurants, Groceries, Packaged Meals)

  • Sudden increase in demand, leading to difficulty fulfilling

Delivery Couriers

Advantages

  • New orders flowing in daily/weekly

Risks / disadvantages

  • Potentially fewer overall orders, if frequent purchases consildate multiple orders into packaged meal subscription

  • Package differences:

    • Heavier (ice packs & insulation) with need to maintain temperature during transit

    • Bigger (user could order up to 12 meals at once)

  • Distribution centers may not be in city centers, causing Couriers to travel farther

Restaurants & Grocery Stores

Advantages

  • Higher WAUs picking their Packaged Meals leading to more Restaurant & Grocery store impressions

  • Potentially higher number of Uber One members redeeming benefits with Restaurants & Grocery stores

  • Restaurants could offer their own packaged meal plans. 41% of consumers would be interested in meal kits from their favorite restaurants. (Source: Fundera by NerdWallet)

Risks / disadvantages

  • Packaged Meal orders may cannibalize total orders from Restaurants and Grocery stores

  • Fewer repeat customers because of additional cheaper option.

BIG TAKEAWAYS

BIG TAKEAWAYS

Uber Eats users are very similar to Packaged Meal delivery users.

  1. They’re similar in age and share the same attitude when it comes to eating food: they want to avoid grocery shopping and seek easy, cost-effective, and time-saving options.

  2. They’re used to similar ordering flows.

  3. The Heat & Eat market is projected to continue expanding at a high rate, meaning there’s likely already high demand from Uber Eat’s existing user base for this type of food.

Also, there are enough advantages for Packaged Meal companies to partner with Uber Eats as a new distribution channel.

TLDR: Uber Eats users & Packaged Meal companies can benefit from a new Packaged Meals offering.

Increase average orders per user per week by introducing Packaged Meals into the Uber Eats experience.

THE GOAL

What should be included in the MVP?

FEATURE PRIORITIZATION & MVP DEFINITION

For a successful pilot to be run of Packaged Meals, the following user stories are required to build.

  • Because this is a completely new meal-type that will be offered within Uber Eats, users need an extremely easy / visible way to explore Packaged Meal partners like Freshly to learn about the offering.

  • Uber Eats users need a way to choose the Packaged Meal partner, coordinate how many meals they want and what those meals are, as well as select a delivery day and time.

  • Uber Eats users need to see information about their order like what they ordered, when it will arrive, and if they need to take any special steps to prepare for the order.

  • Uber Eats needs to build an integration between them and the Packaged Meal brands to ensure meal information is properly and continuously synced. The only way Packaged Meals are able to be delivered at such a cheap cost is by proper planning with large amounts of data.

  • Packaged Meal companies need to know what meals are ordered for which customer so they can produce them and ship them accordingly.

  • Couriers may need special bags / ice packs to deliver these types of frozen packages meals. There should be systems in place to coordinate deliveries with the Couriers.

What options do we have to offer and fulfill Packaged Meal on Uber Eats?

SOLUTIONS EXPLORED

1. Schedule

Users can schedule a batch of packaged meals to be delivered a few days in the future.

Order Types: Batch Subscription or Batch Single Order

Fulfillment Options:

  • Brand: Uber wouldn’t be involved in fulfillment, just the ordering experience. Orders would be fulfilled by existing methods (Fedex, UPS, etc.)

  • Uber: To transport meals from the cooking center to the distribution center in a target city, the Uber Freight network can be utilized. Local Uber couriers can be tasked with picking up and delivering the batches of meals based on a predetermined schedule. To optimize the process, the Logistics team can work with the couriers to route them to the distribution center on their way into the city centers from their homes. This ensures that the delivery process is both efficient and timely. Additionally, to minimize waste, Uber couriers can be provided with reusable ice packs that they can return to the distribution center after each delivery.

2. On-Demand

Users can order packaged meals for delivery within ~30 minutes.

Order Types: Single, Batch, or Add-On

Fulfillment Options:

  • Uber: To ensure that meal inventory is managed efficiently, it is important to predict which meals will be selected in target cities on a weekly basis. This information can then be used to determine an appropriate amount of inventory to take on. To transport the meals from the cooking center to the distribution center in the target city, the Uber Freight network can be utilized. Local Uber couriers can be assigned to pick up and deliver single, batch, or add-on orders, based on the predicted demand. To optimize the process, the Logistics team can work with the couriers to route them to the distribution center on their way into the city centers from their homes. This ensures that the delivery process is both efficient and timely.

Which order and fulfillment type work the best across a variety of vectors?

A Batch Subscription that is fulfilled by Uber has the highest business impact, best user experience, and benefits the delivery couriers.

EVALUATING SOLUTIONS

FINAL SOLUTION

Packaged Meal Subscriptions by Uber Eats

Cost Effective

Save money by using Uber’s delivery network to fulfill your packaged meals.

Healthy Options

Balance your diet with healthy, diet-specific Packaged Meal subscriptions.

Handed to You

Schedule a delivery time when you know you’ll be home, ensuring your food stays safe.

Uber Eats couriers keeps gel icepacks for reuse in future orders.

Sustainable Ordering

What would the User Experience look like?

In an effort to not canabilize Restaurant orders, Packaged Meal options will be a distinct flow in the app.

Separate from Restaurants

Transparent, simple, and educational

At each step, we’ll explain this new ordering concept to users and guide them to order.

Throughout the funnel, we’ll want to message the benefits of subscribing to a Packaged Meal plan on Uber Eats.

Message the benefits

For parts of the ordering funnel that are similar to Restaurant ordering, we can use existing components and patterns.

Use common components

Phased rollout of Packaged Meals

LAUNCH & GTM STRATEGY

We will start the phased rollout with a pilot. Throughout the pilot, we’ll be in “learn and iterate” mode. After we prove out the concept and work out the kinks, we will begin expanding.

Who is involved?
Launching a Packaged Meals pilot will involved various teams across Uber - with deep involvement from our Product/Engineering teams, Logistics, Operations, Customer Support, Data Science, Legal, Partnerships, and more.

Education
We’ll work with a variety of team members to educate internal stakeholders (support, marketing, data science, etc.) and external stakeholders (couriers, packaged meal brands) about the packaged meals product & nuances.

MEASURING SUCCESS

Pilot Metrics

NORTH STAR METRIC

Average Orders Per User Per Week

If successful, we should see an increased Average Order Per User Per Week value because Uber Eats users are ordering more meals throughout the week.

Packaged Meal Brand Impressions
Packaged Meal Funnel Conversion Rate
New Packaged Meal Subscriptions Per Week

LEADING INDICATORS

LAGGING INDICATORS

ARPU Per Month
3 Month User Retention

Average Restaurant Orders Per Week
Average Grocery Store Orders Per Week

One potential unintended side effect of offering Packaged Meals is that Uber Eats users order fewer times at Restaurants and Grocery Stores (because they are getting more cheap meals with a Packaged Meal subscription. This could result in Restaurant and Grocery Store partners leaving Uber Eats which would be very detrimental to the Marketplace. We should monitor these metrics closely.

COUNTER METRICS

Packaged Meal Subscription Start Error Rate
Number of Daily “0 meals available” Error
Packaged Meal Order Send Error Rate

These error-related metrics will help us quickly identify if we need to fix a core part of the Packaged Meal flow. Whether it’s starting a subscription, if we end up offering 0 meals to users, or if we can’t properly send orders to our Packaged Meal partners.

MONITORING METRICS

Final Thoughts

Final Thoughts

SUMMARY
In this case study, the primary objective was to determine if introducing Packaged Meals as a fourth meal type on Uber Eats could potentially increase user retention. My initial hypothesis suggested that offering Packaged Meals would increase retention rates for Uber Eats, catering to consumers who are seeking affordable, convenient, and healthy meal options.

Currently, Packaged Meals are delivered via UPS or FedEx, which does not provide an optimal user experience. Customers have no control over the delivery time, and their food for the week could be at risk of theft. Uber Eats, however, is uniquely positioned to significantly improve the fulfillment process for this type of meal. By leveraging their existing infrastructure, Uber Eats can create a differentiated, seamless experience that adds substantial value for users, encouraging them to order through the platform instead of directly from Packaged Meal brands.

As a Product Manager at Uber, I would recommend conducting a small-scale pilot test in a specific market to evaluate the impact of introducing Packaged Meals on the identified north star metric: Average Orders Per Week Per User. This would provide valuable insights into the viability of this addition to the Uber Eats ecosystem and inform future expansion decisions.

WHAT I LEARNED ABOUT MYSELF
As someone who orders food delivery multiple times a week, I was most surprised to find out through this Case Study that other people don’t do the same. 😂

If you made it all the way to the end of this, thank you very much for reading!