Uber Eats Cleanup: Company To Pull Off 5K Virtual Brands To Prevent Menu Duplication

Uber Technologies, Inc UBER Uber Eats looks to remove 5,000 online storefronts, covering about 13% of virtual brands in North America.

Uber Eats' move marked efforts to prevent the platform from getting clogged by restaurants listing multiple delivery options for the same menu under different names, the Wall Street Journal reports.

Uber Eats proposes to pull off 12 virtual brands selling identical breakfast burritos from a Colorado sports bar; 14 brands serving the same sandwiches from a New York City deli; and online-only options from a San Francisco-based Pakistani restaurant that, at one point, replicated its menu 20 times, WSJ report says.

The number of virtual brands on Uber Eats quadrupled to over 40,000 in 2023 from 2021, accounting for 8% of Uber Eats' storefronts listed in the U.S. and Canada but less than 2% of bookings in the region.

Diners are "effectively seeing 12 versions of the same menu" on the app, John Mullenholz, who oversees the business at Uber Eats, said. "It's fair to say that kind of erodes consumer confidence."

The cuts target many online-only brands with duplicate menus while keeping the parent restaurant on the app, Mullenholz told WSJ.

Uber Eats will introduce new guidelines on Tuesday, requiring that more than half of a virtual brand's menu differs from its parent restaurant and any other brands from the same kitchen. 

It will also mandate online brands to list photos of five items unique to its menu. 

Uber Eats will pull down virtual restaurants whose average ratings drop below 4.3 out of 5 stars, a higher bar than physical restaurants.

So-called virtual brands or delivery businesses without physical storefronts mushroomed on delivery apps during the pandemic.

Earlier this month, Grubhub updated its guidelines to monitor the number of brands originating from the same physical address and orders and cancellation rates from virtual restaurants. 

DoorDash, Inc DASH revealed similar guidelines late last year.

Price Action: UBER shares traded lower by 0.70% at $30.54 on the last check Monday.

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