In April 2014, San Francisco-based Uber Technologies Inc. launched its low-cost private taxi app UberPOP in Spain. For eight months, UberPOP let people in Barcelona, Madrid, and Valencia share their cars (and reduce the cost of owning these cars) with riders who hailed them from their smartphones and enjoyed an efficient and affordable form of transportation. UberPOP kept 20% of the fare while allowing drivers without licenses or insurance to carry passengers. Taxi drivers complained that UberPOP was “putting them out of business and was not properly regulated or safe,” according to The Telegraph. There was a series of vocal protests by various taxi associations. Barcelona taxi drivers, for example, went on a 24 hour strike to protest against the ride-sharing app. After the Association Madrileña Del Taxi, an organization of Madrid taxi drivers, demanded an injunction against Uber, a judge from the Madrid commercial court ordered the company to cease its activity in Spain. The judge also ordered Spanish banks to stop supporting the company’s services and telecom companies to block online connections to Uber’s website and app.
According to The BBC, the Spanish court services said in a statement after the ruling that drivers “lack the administrative authorization to carry out the job, and the activity they carry out constitutes unfair competition.” That is, UberPOP posed unfair competition for taxi drivers and failed to comply with Spanish laws, as outlined in the current transportation legislation, article 101:
“Private transportation is qualified as such if it is used for personal or domestic transportation needs of the owner or close relatives. […] Under no circumstances, will the private driver receive any kind of direct or indirect remuneration except for food money or transportation costs.”
In December 2014, the company announced in a blog post that is was suspending UberPOP in Spain. In the same post, Uber promised, “We will work tirelessly to develop a regulatory framework in Spain that embraces progress;” and that is exactly what it did when it returned as UberEATS in February.
An article in El Pais reveals that Uber initially tried to resume operations in Spain by looking for licensed drivers like those who work for its UberBlack service in the US. This would help the company comply with local laws because, as José Andrés Díez, a lawyer for the Madrid Taxi Association, notes, “If their drivers had the necessary permits, there would be no problem.” However, Uber ran into problems because there are few licensed drivers in Spain’s biggest cities, and most of them are already working for another chauffeur service called Cabify.
Subsequently, in February 2015, Uber returned to Spain by launching UberEATS in Barcelona. The initiative was created as “both a means to enter a new market and a way to keep Uber’s name in the Spanish public eye after its ride service was shuttered,” according to an article in Fortune. Uber issued a statement: “The global fame of Spanish gastronomy, the cosmopolitan character of Barcelona and Spaniards’ great acceptance of new opportunities in the ‘on-demand’ economy, are the main reasons the company chose Barcelona as the first city outside the U.S. to launch UberEATS.” Furthermore, it strategically launched UberEATS in Barcelona right before the city hosted the Mobile World Congress, when over 93,000 attendees – a large portion of whom were technology journalists – visited the city for one of the largest mobile conferences in the world and would be able to try Uber’s new food delivery service.
UberEATS is a food delivery service, similar to UberFRESH in California, which provides a daily menu of lunch and dinner meals that users will receive in under 10 minutes. “In the same time it takes you to walk up Las Ramblas you can open up your Uber app, choose your meal and get it delivered to an address of your choice,” the company writes. Uber has partnered with Spanish food guide Plateselector to curate dishes from some of the best local restaurants that change daily. UberEATS is is not only efficient and delicious, but also affordable as the meals cost about €10 plus a €2.50 delivery fee.
Although there are other companies in Spain that provide food delivery services, such as La Nevera Roja which lets users order food online from over 4,000 restaurants, UberEATS offers something new. With its limited menu and 10 minute delivery promise, UberEATS expedites the decision-making and ordering processes to appease busy consumers. “We believe that by making the experience frictionless, by getting hot food there in 10 minutes, we can create a new market,” says Pierre-Dimitri Gore-Coty – Uber’s general manager for Western Europe.
To order, one simply opens the Uber app, taps the UberEATS icon, enters one’s delivery location, and chooses a meal from the daily menu. People new to UberEATS can enter the code UBEREATSBCN into their account to get the first order free (up to €15). Just like with UberPOP, users can watch their food arrive by following the fork and knife icon on the app’s GPS. This allows customers to know exactly when their delivery is arriving and can be picked up from the driver. The transaction is completely cashless as it is paid for through a registered card on Uber.
The process of ordering food through the Uber app:
In an interview, an UberEATS driver discussed how the service works from his end and compared its logistics to that of UberPOP. His vehicle is stocked with prepared meals from local restaurants that are placed in an insulated thermal bag. The power outlet in his motorcycle is then connected to the thermal bag to heat it. This process allows the food to stay warm for up to three hours. Uber sends a user’s food delivery request to the driver that is closest to the delivery location. When asked whether he likes working for UberEATS, he said it is an easy job to have in addition to his regular work.
As announced in a blog post and an email to clients, this week marks the 50th week since Uber arrived in Barcelona. To celebrate this milestone and continue improving the service, UberEATS now offers two menu options for each meal instead of one. Additionally, between March 23 – 29, the company is providing its UberEATS service for 50% off the normal price.
Despite the success of UberEATS, “sharing economy” services like Uber, as well as Airbnb, will continue running into obstacles as they try to expand globally. Therefore, a Fortune article notes that “to make use of their tech investments, they will have stay on their toes, adapt to regulations, and continue to pivot.”
UberEATS may just be one step closer to Uber becoming an international, generalized delivery business. Fortune aptly explains, “the company is less a ride-selling company than a technology firm that puts unused delivery capacity to use.” In addition to offering food delivery in its UberEATS and UberFRESH services, Uber has experimented with other non-ride services – from package delivery via bicycle couriers in its New York City UberRUSH service to product delivery in its Washington, D.C. UberESSENTIALS service. “Based on their belief that Uber can become a full-fledged logistics and delivery company,” an article in The Wall Street Journal explains, “investors have valued Uber at $41 billion.”