Profitability of virtual restaurants can surpass that of brick and mortar, says Uber Eats regional GM

Customers can only access a VR via a virtual storefront on an app or website
Profitability of virtual restaurants can surpass that of brick and mortar, says Uber Eats regional GM
By Lubna Hamdan
Mon 14 Jan 2019 11:43 AM

The profitability of a virtual restaurant (VR) on online food ordering and delivery platforms such as Uber Eats can exceed that of brick and mortar restaurants, according to the firm’s general manager in the GCC, Damien Drap.

A VR is an establishment that only exists digitally. There is no physical storefront or bricks and mortar presence. Customers can only access the restaurant via a virtual storefront on an app or website.

In an opinion piece predicting the year ahead, Drap said the introduction of the concept led Uber Eats’ restaurant partners to experience a rise in revenues.

“By expanding into the VR space, our restaurant partners in the UAE are increasing their revenues, and in some cases, the profitability of the VR has even surpassed that of the original restaurant. This is a perfect example how data and analytics is transforming not only the food delivery business but also the restaurant industry,” he said.

Uber Eats launched its first VR in 2016 across a number of US cities and have since expanded to host over 2,000 global VRs on the app. It began experimenting with the concept in the UAE last year, after which it saw more than 50 VRs open on the platform.

Drap said the concept offers a “win-win” situation for restaurants and consumers.

“For a minimal incremental cost, our restaurant partners can offer multiple menus and cuisines from the same real estate, maximising revenue opportunities and making their operations more efficient. At the same time, consumers get to enjoy more selection and varied food options in their local area,” he said.

The general manager said the company is looking to expand its operations in the Middle East in 2019.

“We’re optimistic about the future, and thanks to our strong product and brand, as well as the momentum we’re seeing in cities across the Middle East, we’re confident Uber Eats will continue to grow at a rapid pace and we look forward to expanding our business even further in 2019,” he said.

In November last year, Uber Eats named Dubai as one of its fastest growing markets, stating that it doubles the size of its business in the city every six months.

For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.

Subscribe to our Newsletter

Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.