Uber buys ezCater for $2.3B: catering orders move to Uber Eats

Uber is buying ezCater, the workplace catering marketplace, for $2.3 billion in cash. The deal was announced October 6. If your restaurant takes corporate catering orders through ezCater, the platform behind those orders is about to belong to the same company that runs Uber Eats. That changes who sets your fees, who owns your customer list, and how big the pool of buyers gets.

What actually happened

From Uber's press release and TechCrunch's coverage:

• Price and structure. $2.3 billion, all cash. Uber expects it to close in the coming months, subject to regulatory approval.
• ezCater's size. More than 140,000 restaurants on the platform and $2.5 billion in gross bookings over the last twelve months, growing in the high teens year over year. Average orders run above $400.
• Profitability. Uber says ezCater is profitable on a non-GAAP operating income basis.
• The plan. Uber says it will combine ezCater's catering and B2B business with Uber Eats' consumer reach and Uber for Business's corporate accounts. It did not say whether the ezCater brand or app survives, or how fees will change.
• Context. TechCrunch notes Uber is also pursuing a $15 billion Delivery Hero deal. Uber is buying share in delivery wherever it can.

Why it matters for your business

A $400 catering order is the best ticket most restaurants see all week. Right now it often comes through ezCater. After the close, it comes through Uber. Three things follow.

1. Demand probably goes up. Uber for Business already holds the corporate meal accounts. Putting catering in front of those buyers is the whole point of the deal. More orders is the upside.
2. Terms will get rewritten. Nobody pays $2.3 billion to keep the old commission sheet. We have not seen any fee changes announced, and we would not guess at them. But plan for a new contract, not the one you signed with ezCater.
3. The customer relationship moves further away. The office manager who orders from you every Thursday is ezCater's customer today. Tomorrow they are Uber's. If you do not have their email and a direct way to reorder, you rent that account.

What we would do this week:

• Pull your ezCater numbers. Order count, average ticket, and net payout after fees for the last 12 months. You need a baseline before terms change.
• Build a direct catering order page. A simple form or menu with lead times, minimums, and invoicing for repeat corporate buyers. Keep the marketplace for discovery. Move the regulars to a channel you own.
• Capture contact details on every order. Put a reorder link or card in every catering delivery.

Sources: Uber press release, TechCrunch.