Domino's has signed a deal to partner with UberEats which will let customers make orders on the delivery app for the very first time.
The pizza giant has long said that partnering with delivery companies didn’t make economic sense in its 6,600 US stores - despite being available for franchises in a handful of international markets like the Netherlands.
However, in a U-turn, the company revealed uniformed Domino’s drivers will still make the deliveries that customers order via Uber Eats.
They also said Uber Eats will share data with Domino’s on delivery efficiency and incremental sales.
Ann Arbor, Michigan-based Domino’s wouldn’t say what percentage Uber Eats will take from each order.
The partnership will be piloted in four US markets starting this fall and is expected to be available nationwide by the end of 2023, Domino’s said. Uber Eats will Domino’s exclusive US partner until at least 2024.
Domino’s CEO Russell Weiner in a statement: “Domino’s will still be the face our customers see at the door, while Uber will be providing us with adequate data to understand delivery efficiency and incrementality."
Domino’s shares jumped 10% in morning trading.
Uber CEO Dara Khosrowshahi revealed the company was looking forward to bringing Dominos to its app.
He said: “We’re excited to announce this unique partnership with Domino’s globally — both starting as their exclusive third-party marketplace partner in the US and making their menu available to our consumer base around the world — and we look forward to bringing customers the convenience, technology, and experience that are foundational to both of our brands
Domino’s had been reluctant to partner with third-party apps in the US because it wanted to control the delivery experience.
In 2019, then-CEO Ritch Allison predicted that third-party delivery would eventually collapse because companies were charging too little for the service.
But then the pandemic happened. Demand for delivery soared and remained elevated even as COVID waned. Domino’s found itself losing market share to competitors who were available via third-party apps.
Uber’s head of delivery for the Americas, Sarfraz Maredi believes the partnership will bring the pizza giant new customers.
He told The Journal: "We can bring them a large number of new customers who are either not ordering from them as frequently or who don’t have Domino’s as top of mind."
In the year ending May 28, Uber Eats, DoorDash and other delivery companies accounted for 14% of US pizza sales or $4.7 billion up from 4% before the pandemic, according to Circana, a market research firm.
Little Caesar’s, the third-largest pizza chain in the world, inked a delivery deal with Uber Eats in April.
