Brief:

• UberEats, the food delivery service from ride-hailing pioneer Uber, has added in-app restaurant reviews to help customers decide on the best places to order from and is helping restaurateurs to meet unmet demand in their delivery area with "virtual restaurants," TechCrunch reported. The UberEats standalone app also has new personalized menu recommendations and an easier way for users to refer back to their most-frequented dining spots.
• With the new features, consumers can rate their delivery person and the restaurant on a five-star scale, and a thumbs up or down on individual menu items. People browsing the app will see the ratings based on the prior 90 days of reviews.
• UberEats also is in the early days of testing out "virtual restaurants" that exist only in the app. The idea is to tell restaurateurs about food searches in their neighborhoods that don't have a corresponding eatery to satisfy those consumer cravings. Using that information, a pizzeria with the right kitchen equipment could expand to start selling fried chicken, for example, under a new name that only UberEats users can access.

Insight:

Uber has set up the infrastructure for mobile users to order car rides, and for the driver and rider to review each other. With UberEats, the company is building out food delivery that now needs much more content to remain valuable to smartphone users who've no shortage of other ordering options to choose from. By allowing them to review restaurants directly within the app, UberEats can circumvent rivals like Yelp, whose users have now contributed more than 142 million reviews in the past 12 years, along with digital-first platforms like Grubhub and Doordash.

The new ratings system aims to benefit both consumers and restaurateurs, with better transparency among the community of people dining in and deciding what to eat based on reviews. Restaurants, in turn, can use them to get a better idea of what their consumers want and how they could improve their menu and services.

While these types of five-star reviews have existed elsewhere for a long time, the "virtual restaurants" concept is far more novel for UberEats. In short, the company collects data on local searches for food that doesn't have a nearby dining option to fulfill cravings. Then, UberEats will share this data with restaurateurs, who have the option to brand a separate business to meet the local consumer demand. These new dining options are then only available within the UberEats app. It's a creative idea, as it lets restaurant owners harness market data that's traditionally difficult to collect, especially for smaller establishments that can't afford to conduct market studies and must depend on more direct customer feedback to glean insights about their needs.

As Restaurant Hospitality reported, a Chicago pizzeria owner built a business selling fried chicken after UberEats told him that users had been searching for "chicken" in the app, with little success in his neighborhood. Instead of adding fried chicken to his menu, restaurateur Simon Mikhail created a virtual restaurant called Si's Chicken Kitchen that was only available through the app.

UberEats is clearly trying to replicate that success, testing virtual restaurant opportunities in Chicago, Atlanta, Denver, San Francisco, Philadelphia and Toronto, per TechCrunch.