Investors Still Hungry For Food Delivery!

Private and public investors are still bullish on the food delivery market.

As investors continue to pour millions into the third-party food delivery platforms, many analysts remains bullish about the sector.

Uber is expected to become a public company this week in a highly anticipated initial public offering. Even though Uber lost nearly $2 billion in 2018, experts still expect it to be valued at around $80-$90 billion. Part of the future anticipated profits will be driven by Uber Eats.

According to equity analysis firm Morningstar, Uber Eats is growing at a rapid rate and has already taken a large chunk of market share from competitors like Grubhub.

Uber Eats now accounts for over 25% of all U.S. food-delivery and takeout orders; that's up from about 11% a year and a half ago. Meanwhile, Grubhub's share of delivery and takeout orders have gone down to less than 40% from more than 60% in the same time period.

According to Morningstar, "there are actually a lot of Uber riders that, while they're getting a ride in an Uber, they're also ordering food from Uber Eats to arrive to their home by the time they get there. You're basically looking at marginal cost, or cost per transaction completed, declining over time. We think that's one of the reasons why margins are going to widen and why Uber will go toward profitability going forward."

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