UberEATS, a food-delivery company under the Uber brand, expects to break even in Hong Kong within six to eight months with a strategy that focuses more on locals than expatriates.
“A lot of our competitors are heavily focusing on expat customers, who are decreasing in number as many financial institutions are moving out of Hong Kong,” Horace Lam, general manager of UberEATS Hong Kong, said in a media briefing.
As local people are the new target customers, UberEATS has spent a lot of time searching for partnerships with small local restaurants, Lam said.
UberEATS entered Asian markets by launching its servers in Singapore in May last year. It then launched a branch in Tokyo in September, which was followed by the Hong Kong branch in October. It is currently operating in Taipei, Bangkok and three Indian cities.
Since its launch in Hong Kong, the company has so far formed partnerships with 1,300 restaurants across many districts in the city. More than half of its customers are local people, who like to eat Chinese food.
UberEATS charges the customer HK$20 (US$2.56) for every order, regardless of the quantity of the delivery, to pay its 300 to 400 delivery helpers who take the food to customers by bicycle or motorcycle or on foot. It also charges the restaurants a certain percentage of each transaction.
“The food-delivery market in Hong Kong is new, with a low penetration rate. It is different from some matured markets such as New York and Singapore,” Lam said. UberEATS will emphasize service quality and user experience instead of striving for exponential growth, he said.
The company also has no plan to expand through mergers or acquisitions as it wants to maintain a healthy financial situation, he said.
Competitors in Hong Kong’s food-delivery sector include Foodpanda and Deliveroo.
Hong Kong’s technology policy
While UberEATS is growing steadily in Hong Kong, its parent Uber remains under the shadow of the government’s unclear plans for a new technology policy in the city.
In May, five Uber drivers were founded guilty in a Hong Kong court of driving vehicles for hire without permits and third-party insurance two years ago.
Kenneth She, general manager of Uber Hong Kong, acknowledged that some people had stopped driving for Uber because of the police action, but some of them had already returned to the market as the new government under Chief Executive Carrie Lam Cheng Yuet-ngor has so far shown no sign of further suppressing the city’s online cab-booking service providers.
She said the company hoped the Hong Kong government would amend relevant legislation and open up the market for taxi-hailing apps. He said the Singaporean government had allowed Uber and its peers to provide services legally in the city-state since 2015 as it wanted to discourage car ownership.
Since the Uber app was launched in Hong Kong in 2014, more than 30,000 people have registered as Uber drivers in the city, with a few thousand of them remaining active in providing services to customers.