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Uber To Take On Postmates, DoorDash With Expanded Meal Delivery Service

Jan 20, 2016

After months of operating a lunch-only meal delivery service in a few cities, Uber is planning to expand to all-day service in 10 U.S. cities.

The expanded meal deliveries will be available in cities including Los Angeles, Chicago, New York, and Austin in the coming months, Wall Street Journal first reported, and Uber later confirmed to Fortune. The timing of the expansion is unclear.

Along with the new service, Uber also plans to introduce a standalone UberEats app for its meal delivery business on iOS and Android by the end of March. When that happens, its current lunch service will be renamed Instant Delivery and will be available through both the UberEats app and the Uber's flagship app, according to a spokeswoman.

Uber began testing this standalone app last month in Toronto, where customers can order food between 10 a.m. and 10 p.m.

Uber co-founder and CEO Travis Kalanick has long been clear about the company's ambitions to ferry more than just passengers. Along with its lunch service, the company has experimented with delivering a variety of items, from ice cream to toothpaste. A few months ago, Uber premiered a revamped version of its UberRush service, which now provides same-day delivery for merchants in some major cities.

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The new meal delivery service would challenge startups like Postmates, Caviar, and Doordash, whose mobile apps let customers place orders directly to restaurants. Delivery services then pick up and shuttle the orders to customers. GrubHub and Seamless, on the other hand, let customers order from restaurants through their apps, but leave the delivery to the restaurant's own staff.

For its lunch service, UberEats offers only a limited menu of food. Drivers load their cars with individually packaged portions from the menu and then deliver them after orders are placed.

With the expanded service, drivers will operate in a similar manner as those of the above services by picking up orders from restaurants when they're ready.

Since picking up, handling, and delivering meals is quite different from chauffeuring passengers, the company's local UberEats teams will ensure that drivers know how the service works and how to pick up and deliver orders, an Uber spokeswoman told Fortune.

Along with delivering hot meals, Uber and its competitors have something else in common: Most are embroiled in lawsuits for classifying drivers as contractors instead of employees with benefits. Uber's case, which is furthest along, is being closely watched by similar delivery startups as a bellwether for the industry because of the potential for higher costs.

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