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Strategic Management & Leadership in Online Food Delivery

Executive Summary

The business paradigm of food delivery has become a rapidly developing aspect of the food market. The emergence of an extensive network of online food delivery applications, including Uber, Eats, DoorDash, and Just Eat, has changed both the patterns of customer service in the hospitality industry and the consumer’s purchasing behavior. Although with the outbreak of the COVID-19 pandemic, the online food delivery industry has become unprecedentedly relevant to an average customer, the overall profitability of these companies remains rather low. Uber Eats, being one of the pioneers and leaders in the online food delivery market, has now found itself at a competitive disadvantage due to the poor patterns of corporate social responsibility and reactiveness to the market demands. Based on the game theory of strategic management, the decision to employ a differentiation leadership strategy was made. With the help of this strategy, Uber Eats can rediscover its competitive value through the introduction of socially responsible and sustainable practices in food delivery and app functionality.

Strategic Report


Currently, the notion of technology in the context of food delivery has significantly affected the conventional patterns of ordering food from restaurants and eating take-out food. According to See-Kwong et al. (2017), ‘convenience is the biggest appeal to the consumers as the steps required to make an order is as simple as few clicks on mobile devices like smartphones’ (p. 2). Indeed, it is convenience that serves as a primary foundation for the customers’ choice in the modern services industry.

Back in 2009, the establishment of Uber as an alternative online taxi service with a bigger network and better prices was nothing but a demonstration of convenience as a driving force for business development. However, over the years, the notion of convenience has become intertwined with a variety of aspects, including one’s corporate social responsibility and the overall quality of service introduced. Thus, since 2017, Uber has been involved in a series of CSR-related conflicts, including their strategy of price surcharge during mass protests and sexual harassment allegations (Chen and Tao, 2020). Such serious precedents, for their part, inevitably affected all Uber’s projects, including Uber Eats, with the company being on the verge of ‘canceling.’ Since then, the company has experienced some major changes, including the introduction of a new CEO and the adaptation to the COVID-19 context (Choudhury, 2017; Hawkins, 2021). Uber Eats is no exception to the mixed public reaction, especially as far as the pandemic is concerned.

Although Uber Eats is not considered to be one of the most demanded businesses launched by Uber, this subsidiary still struggles with securing proper sustainability levels. According to Rana and Haddon (2021), the online food delivery industry struggles to gain profits due to the fact that the majority of raw profit from the order goes to the restaurant, delivery people, advertising, refunds, and promotions. As a result, the company is left with approximately 3% of the cost paid by the customer. For this reason, the aim of the present strategic report is to take a closer look into the specifics of the online food delivery industry and define possible strategic options for Uber Eats to gain profit and a stable position in the market.

Strategic Management Theoretical Framework

Essentially, the paradigm of the hospitality industry, including delivery services, is closely related to the interaction with the stakeholders, especially as far as the customers and drivers are concerned. In order to establish a strategic destination for Uber Eats, it is of paramount importance to dwell on the company’s vision, mission, and core objectives (Tarifi, 2021). Currently, Uber has a rather extensive mission statement that can be narrowed down to the mission of going anywhere and getting everything with one click (Uber, n.d.). Thus, Uber envisions itself as a company that serves as a pioneer in providing people with the best delivery experience possible, focusing on customer satisfaction. However, it becomes evident from the actual customer reviews from Trustpilot and Yelp that the level of customer satisfaction is currently extremely low due to poor customer service (‘Uber Eats,’ 2021; ‘UberEATS,’ 2021). Out of nearly one hundred reviews that are shown on the website, no more than 5% of them are at least somehow positive. Hence, there is currently an explicit disruption between the values of the company and its performance in the market.

Such a poor execution of the company’s vision is highly dependent on the company’s complicated relationship with the drivers and delivery persons, customers, and restaurants. To begin with, the restaurants, as the major stakeholders, are currently highly dissatisfied with the necessity to cooperate with the delivery services. Back in January, the CEO of Uber was faced with the information that the restaurant owners mentioned they hated Uber Eats and DoorDash for degrading small businesses in the midst of the pandemic while creating the impression of assisting small businesses (Swisher, 2021). Dara Khosrowshahi, seemingly taken away by the response, demonstrated that the company was either unaware of the issue or was deliberately ignoring the existing problem. According to Mintz (2021), as of now, delivery apps take nearly 20-30% of commission from the restaurants while paying minimal wages to the delivery personnel. It inevitably creates a significant disruption in the quality of services provided and stakeholder satisfaction.

There is evidence that demonstrates that food quality has an explicit effect on the customer’s satisfaction with the online food delivery app. Indeed, according to Suhartanto et al. (2019), the impression received from the food quality directly affects one’s loyalty to a delivery app, whereas the service quality may alter the customer’s initial perception of food. As a result, in order to establish an efficient cooperation framework in terms of service, the strategic management endeavors should dwell on the specifics of communication with restaurants and drivers. In order to do so, it is necessary for the company to encourage the competing businesses to follow suit and embrace similar approaches to corporate responsibility, as, otherwise, Uber Eats will be at risk of becoming even less profitable.

The theoretical framework applied in this case may be the game theory. The major premise of the game theory stands for the concept that every strategic decision is made on the basis of various calculations that predict possible actions of the competitors (Marden and Shamma, 2018). As a result, the outcomes of the choice made by Uber becomes dependent on the choices made by its competitors. However, as far as Uber Eats is concerned, the adoption of such a theory may become an asset due to the fact that previously, finding a balance between decent employee benefits, company profitability, and quality of service in the food delivery industry was claimed as impossible.

However, if one of the world-leading food delivery services is able to adopt such a strategy, the customers will immediately expect the same from the rest of the competitors, presenting a significant advantage for the company. According to Jayasekara et al. (2021), the application of game theory to the strategy of managing employee benefits and job satisfaction has positive potential. In the case of Uber Eats, better employment opportunities for the employees and more reasonable commission rates for small restaurants may result in higher job satisfaction, increased productivity, higher customer satisfaction, and better customer retention rates.

External Factors and Strategic Management

As an international company, Uber struggles with various external factors on a daily basis, as both the legislation and the socio-cultural context across the countries differ significantly. For this reason, it is necessary to dwell on each of these aspects with the help of the PESTLE analysis. This concept may be defined as the model that ‘appraises each of the key factors, which are directly and indirectly affecting the business performance so that the strategies could be developed to overcome the issues for a better market position’ (Perera, 2017, p. 4). Hence, the PESTLE analysis for Uber Eats looks as follows:

Table 1. Uber Eats PESTLE analysis

Political Factors Economic Factors Social Factors Technological Factors Legal Factors Environmental Factors
Uber as a threat to the political infrastructure and economy Sharing economy is not accepted across the globe The perception of the company’s corporate social responsibility is controversial. The rapid development of technology Employment legislation differences Severe carbon footprint
Uber’s shared economy model is regarded as inappropriate and unethical: California Gig Worker law (Conger and Browning, 2021) Competition in the market: presenting a threat to restaurants’ delivery services, being threatened by local alternatives. Easy access to the service regardless of location (globalization and the rapid dissemination of Internet connection) Drone delivery and automated vehicles: less personnel, less corporate social responsibilities, and payments. Wage legislation Lack of sustainability
Wage laws for the workers: contractors ineligible for minimum wage Pricing policy may be insensitive to some areas. An extensive network of negative reviews is accessible worldwide. Passenger safety legal issues

Based on Table 1, it becomes evident that the notion of employment plays one of the most significant roles in the process of international strategic management. A prime example of such a distortion concerns the recent discussion of the California Gig Worker law (Conger and Browning, 2021). According to the bill passed in 2019, sharing economy companies such as Uber and Lyft were obligated to make the drivers full-scale employees instead of contractors. The company refused to do so, arguing that such a shift did not align with the company’s employment regularities. In order to demonstrate that the ‘employee-contractor’ relationship was more beneficial for the driver, Uber launched the ability for the drivers to present their own prices on delivery (Sandler, 2021). However, over time, the company refused this option for the sake of better customer satisfaction and conventional pricing.

Although being a contractor may have some benefits for the employees, the lack of employment benefits makes drivers and delivery personnel extremely vulnerable, as they depend solely on the profit from services without having access to normal health insurance, minimum wage, and social security. While during the preparation of the public offering, the Uber CEO publicly acknowledged that such a model was stressful and unbeneficial for many workers, two years later, he mentioned that every existing contractor would choose that pattern of collaboration instead of full-time employment (Wong, 2019; Swisher, 2021). While it could be challenging at the beginning, it is now clear that the company should provide the drivers and delivery personnel with the opportunity to become full-time employees prior to making such a decision for them.

When speaking of the external factors, it is impossible not to mention the outbreak of the COVID-19 pandemic as a trigger for the industry development. According to the various studies, such COVID-induced concepts as the fear of infection have become a behavioral driving force for the industry’s rapid expansion, replacing such inherent behavior as trust, attitude, and service quality (Bouarar et al., 2021; Kaur et al., 2021, Troise et al., 2021). For this reason, it becomes evident that such a beneficial context is temporary, and the company has no long-term plan for customer retention.

Strategy Formulation

When proceeding speaking of Uber Eats as a multinational company, it is necessary to evaluate the business through the prism of Michael Porter’s five forces model. Essentially, this model stands for the process of defining the extent of the industry’s relevance and effectiveness through evaluation of such notions as rivalry between the competitors, threat of entry, the threat of substitutes, supplier, and buyer power (McKay et al., 2020). Thus, for Uber Eats, the model may be outlined as follows:

Uber Eats Porter’s five forces model
Figure 1. Uber Eats Porter’s five forces model

When looking at this analysis, it becomes evident that currently, Uber Eats finds itself in a controversial position due to its recognition in the market and high product diversification, and simultaneously, an unstable environment characterized by customers’ high dissatisfaction rates and the rapid emergence of new competitive forces. Hence, the high forces executed by competitors, suppliers, and buyers create a perfectly competitive environment where Uber Eats should not perceive itself as a monopolist due to an extensive network and buyer recognition in the international market (Varelas and Georgopoulos, 2017). In order to define its competitive advantage more closely, it is necessary to conduct a VRIO analysis that stands for the approach to assessing the value, rarity, inimitability, and organization of a company (Murcia et al., 2021). In the Uber Eats context, the assessment is as follows:

Table 2. Uber Eats VRIO analysis

Resource or capability Valuable Rare Inimitable Organized
Quality food delivery YES NO NO NO
Customer service YES NO NO NO
Restaurant assortment YES YES NO YES
Product differentiation YES YES NO YES

Based on this analysis, it may be concluded that currently, Uber Eats finds itself at a temporary competitive advantage, as it has some time before new entrants to the market start to imitate the service diversity and application functionality presented by the company. For this reason, in order to secure a stable competitive advantage, it is of paramount importance for the company to employ technological innovations that would be hard to imitate in the short term (Yu et al., 2017). A prime example of such an innovation is drone delivery of food and retail products. According to various researchers, the introduction of drone delivery may contribute to the improvement of delivery time, better environmental awareness, and fewer issues with hiring contractors (Jasim et al., 2021; Warwick, 2019, Jayasekara et al., 2021). Moreover, Uber Eats has a competitive advantage of being a part of a multibillion Uber company that can allocate financial resources to secure such a strong competitive advantage in the market.

Finally, when pondering the relevant strategy, SWOT analysis is an essential tool in defining the opportunities and directions for further strategic management. SWOT analysis stands for the close examination of the strengths, weaknesses, opportunities, and threats for the company (Vlados, 2019). Thus, in the context of Uber Eats, the SWOT analysis is as follows:

Table 3. Uber Eats SWOT analysis

  • Product diversification
  • Extensive supplier network
  • Promotional advantage
  • Brand recognition
  • Functional mobile application
  • Poor operational model
  • Poor customer satisfaction rates
  • Low CSR levels
  • Stakeholders’ dissatisfaction
  • Reputation
  • Network expansion
  • Product diversification
  • Collaboration with competing companies in sustainable deliveries
  • Securing full-time driver employment
  • Encouraging sustainability practices (e.g., drone delivery network)
  • COVID-19 pandemic
  • ‘cancel’ culture
  • Loss of competitive advantage
  • Loss of contracts with restaurants due to high commission rates
  • Ecological awareness trends
  • COVID-19 pandemic

Such a framework of potential threats and opportunities demonstrates the urgent need to reconsider the current Uber Eats policies in terms of cooperation with buyers and suppliers in order to secure a more socially and environmentally friendly cooperation pattern. For example, the functionality of the app currently has more options than its competitors, including the ability to connect to the restaurant and track the delivery in real time. Simultaneously, the way Uber Eats handles their app becomes a weakness, as the variety of options stand in the way of rational management of customer service and tech support. For this reason, the company currently has a choice to turn this asset either into a threat or an opportunity. Hence, based on Porter’s generic theories, the corporation may choose either the strategy of cost leadership establishment or a strategy of product differentiation (Suleman et al., 2019). In the case of Uber, the company has been notorious for its adoption of a blue ocean, or hybrid strategy that aimed at finding a balance between differentiation and cost-efficiency (Hales and Mclarney, 2017). In the beginning, the strategy proved itself successful due to the fact that people were interested in gaining cost benefits for the services provided.

However, over the past years, the emergence of corporate social responsibility (CSR) has resulted in the socio-economic tendency that could no longer perceive cost-efficiency in isolation from the impact such practices have on society, employees, and other stakeholders (Agudelo et al., 2019). It has soon become evident that in the case with Uber, the cost leadership the company pursued happened at the expense of not providing drivers with any kind of employment security and contract obligations to pay minimum wage.

Moreover, other practices described earlier in the report contributed to the rapid deterioration of the company’s perception of the market. According to the researchers, companies that embrace CSR are more likely to become popular with customers who tend to appraise one’s social awareness (Islam et al., 2021; Ali et al., 2021). The issue is especially relevant in the case with ethical considerations considered by the company, as the customers often do not want to identify themselves with the practices that are ethically inappropriate and ignorant (Chen et al., 2021). For this reason, it becomes evident that Uber Eats striving to settle for two strategic directions simultaneously has resulted in disruption in terms of the customer perception of the product.

In order to resolve this issue, it is highly advised for the company to settle for product differentiation and CSR practices instead of cost leadership. The idea of product differentiation concerns the organization’s focus on the quality of products and services provided. Hence, the higher the quality, the higher can be the price for the service, but such an increase is justified by the competitive advantage provided. According to a 2019 survey, the majority of customers are now more preoccupied with the ethical and social stance of a product rather than its price, as the respondents realize that a low cost for a specific service is almost always related to someone’s severe financial losses (Cox, 2019). Currently, Uber Eats finds itself at a competitive advantage of delivering an extensive assortment of products, including liquor and prescription medications. Further development in this direction with lead to higher levels of inimitability and exceptional value for the customer.

Moreover, the product differentiation should also concern the optimization of the existing Uber Eats app, as there are currently many customer complaints associated with the application bugs and complicated interface of the service. Although such innovation requires financial investments, the company should not feel obliged to keep the prices low, as the customers rarely complain about the prices. Instead, they are dissatisfied with the quality of service they receive for such a price. Once this is fixed through product differentiation and a proper marketing campaign, customers will be aware of the service they receive for their $1-8.

Strategy and Innovation

Essentially, the chosen strategy of product differentiation stands for the process of introducing new approaches to the conventional patterns of food delivery. Whereas in the beginning, Uber Eats was a revolutionary service of online food delivery with an extensive network of restaurants to choose from. However, over the years, the competition in the market has created the demand for innovative approaches to delivery. In order to secure a competitive advantage, Uber Eats presents a convenient and top-notch app for ordering food, including such options as photos of dishes, live delivery tracker, filtering food preferences, pre-ordering, and scheduling delivery (Space Technologies, 2021). However, despite the variety of options, some of the most widespread customer complaints concern the app’s frequent crashes and bugs, including the inability to track delivery, charging failures, automatic order cancelations, and deliveries lost on the way to the customer. For this reason, the existing innovative approach to food delivery should focus on the back-end development or the functional properties of the app.

In such a way, the customers’ satisfaction with the service will subconsciously impact their impression of the food delivered and, eventually, contribute to the user retention rates. One of the primary objectives in terms of innovation should include the implementation of a redesigned logistics team. Logistics will help the delivery people identify the best possible delivery routes with the help of real-time connections to Google Maps and navigation (Torrese, 2021). While there is currently GPS navigation in Uber’s Driver app, the data quality, based on customer feedback, is rather disturbing.

Another ground for innovation should be the promotion of CSR within the delivery context. There are two possible options for CSR implementation:

  • The minimization of delivery system’s carbon footprint by introducing an innovative approach to delivery, e,g., expansion of Uber Green network to delivery, or implementation of drone door-to-door delivery;
  • The introduction of campaigns in favor of supporting small businesses by promoting them in the app and making delivery discounts.

At first, these strategies may seem unbeneficial in terms of the profitability of the company, which is a major concern for the company. However, the implementation of a cost leadership strategy is likely to become a short-term solution at best, whereas the losses are triggered by unsustainable practices and a lack of product optimization.

Implementation Strategy

The chosen implementation strategy will concern the most relevant strategy of Uber Eats development: the optimization of the Uber Eats mobile app and functionality. The current strategy is expected to finish in March 2022, given the groundwork process starts immediately. Thus, based on the Gantt chart, it becomes evident that the strategy, or the optimization project, in this case, is divided into five major steps:

  • Goal setting.
  • Analysis.
  • Strategy formation.
  • Strategy implementation.
  • Strategy monitoring (Boufim and Barka, 2021).
Implementation Gantt chart
Figure 2. Implementation Gantt chart

Hence, based on this framework, the development of the strategy will be conducted through interprofessional cooperation within the firm, namely, the team of sociologists, IT department, customer support, sales team, human resource team, and the Board. In this case, Uber has a chance to create a strategic tool that will eventually benefit all the stakeholders. In order to draw the Board’s attention, the R&D team needs to ensure that during the analysis stage, they create a detailed forecast of the company’s competitive advantage and profitability in the market. Hence, after the launch of the app, Uber shareholders will have access to the long-term profitability plan of the company, customers will be able to participate in the app relaunch with the help of feedback, and the employees will be able to access more cost-efficient navigation system that would allow them to save money on delivery and increase their tip through fast and accurate delivery.

As far as the budget is concerned, the whole implementation process, starting from goal setting up to the app launch, will require a pessimistic budget of nearly $115 million, which as a bearable sum of money for such an enterprise. The optimistic version of the budget will save money on the technological aspect of the renovation, given that the functionality should be optimized and not changed. In order to properly allocate money to the process, it is of paramount importance to create standard operating procedures for every implementation stage. Later, the SOP should be established for the customer support. For example, in the case of slow delivery, the customer support team should have a working set of operations, including reaching out to the restaurant to find out the stage of preparedness, reaching out to courier to check on navigation, and immediately reaching out to customer with an update. In case the delivery fails or becomes irrelevant, customer support should be able to initiate a refund

Recommendations and Conclusion

Uber Eats has now found itself in a confusing place where their demand is unprecedentedly high, but the business profitability remains unstable and unbeneficial. Hence, instead of profiting out of the pandemic context where both suppliers and buyers have no choice, the company should create a long-term vision of Uber Eats being a socially responsible business in demand for its efficiency. Such a goal can only be achieved through the reconsideration of the company’s organizational strategy at its core. In such a way, through the adoption of CSR practices and better functionality, Uber Eats has the potential of becoming the most powerful online food delivery service in the market, as its parent company has the ability to provide the subsidiary with support and an extensive network of service users.

Hence, the adoption of a product differentiation strategy that is focused on the redesign and development of new sustainable service assortment is a financial investment that will guarantee results in the long term. If currently, when users and restaurants are stuck with the choice of online delivery services, the company still fails to create a steady profit, the situation can only deteriorate in the future. For this reason, it is of paramount importance to allocate resources to innovation when the company finds itself in such universal demand.

Organizational Redesign

Currently, the organizational structure of Uber in relation to its subsidiary Uber Eats obtains an extensive hierarchic chain, which makes it complicated to implement considerable strategic changes. Hence, the current structure looks as follows:

Uber organizational structure
Figure 3. Uber organizational structure (The Official Board, 2021)

Hence, the online food delivery business is controlled directly by the CEO, whereas the general manager of Uber Eats is responsible for the payments, driver operations, marketing, and mobility. It becomes evident that, as of now, this division of the company does not obtain personnel that would address the ideas of innovation locally and not on the level of a parent company. Such a model of relationship creates a hierarchy organizational culture, which is usually focused on stability and integration. Moreover, the overall structure does not account for the division potentially addressing CSR practices. According to Soderstrom and Weber (2020), the idea of sustainability within an organizational structure and the domain of social interactions provide insights into the organizational performance of an enterprise. For this reason, the creation of the CSR Committee on the Board of Directors would be the first step towards a beneficial redesign of Uber.

Hence, the CSR committee will include two major divisions: internal audit and smaller committees on the environment, safety, and ethics. The structure will be as follows:

CSR structure
Figure 5. CSR structure

As far as the other aspects of the organizational structure are concerned, the additional focus should be paid to the idea of human capital and its contribution to the overall quality of the services presented. Thus, according to Marczak and Yawson (2021), some of the fundamental motivational theories in the context of employment include cognitive evaluation theory, feedback, and incentive theory. Currently, the organizational structure of Uber presents drivers with relative autonomy in terms of working hours. However, apart from that, drivers find themselves in so-called limbo, as they are not expected to have a minimum wage in case of a force majeure, health insurance, employment, and retirement benefits. Moreover, due to some modifications, Uber drivers are not allowed to put prices for delivery and see the final destination until they accept the ride.

Eventually, such limitations cause inconvenience for both the customer and the driver, as the communication is disrupted. The lack of feedback and incentive undermines the driver’s motivation to provide quality service to the customer. When employed as a contractor, the worst-case scenario for the employee is losing a tip or payment for the order. However, the same slight mistake in delivery may cost a company its reputation. Once the employees are officially employed in the company, they accept the responsibility of working for such a notorious enterprise. Moreover, employment may impact the overall perception of poor quality work simply due to employees’ ability to feel a sense of team and communal commitment (Zhaldak, 2021; Lartey, 2020). Hence, the second step toward organizational structure optimization should be the opportunity for full-time driver employment.

The next issue with the current functional organizational structure is the lack of attention to innovation. Although the company currently obtains divisions addressing advanced technology, design, and innovation, they are not explicitly related to Uber’s subsidiaries. As a result, the innovative policies introduced by the company may appear rather ignorant to the issues relevant exclusively to one of Uber’s branches. For example, the issue with the small business commission and unethical behavior towards small restaurants in the middle of a global pandemic may not be of serious concern to the head office, as they are not directly faced with the issue. For this reason, there is an explicit need to redesign the existing functional organizational model into a product-based one, especially considering the recommended strategy of product differentiation.

Hence, the approximate structure of Uber in order to produce beneficial results from each service should look as follows:

Product-based Uber organizational structure
Figure 6. Product-based Uber organizational structure

In such a way, every Uber subsidiary will have access to innovative resources of structural organization and immediate feedback in terms of existing trends in the local markets. Moreover, the novel organizational cutlure of adhocracy presents space for flexibility and product differentiation, which is crucial for the chosen strategy.

The final aspect to consider when pondering the organizational structure of a company is the effect such reorganization will have on the work environment. According to Gaspary et al. (2020), some of the most important structural dimensions that have an impact on innovation and the work environment include ‘the level of communication, level of formalization, and job codification’ (p. 132). The implementation of the product-based organizational model is a beneficial way to secure more open communication within the team, as it encourages every subsidiary to have a personal vision of the project and the ability to respond rapidly to external trends. Moreover, motivating drivers to participate in the dialogue may serve as an asset in terms of presenting how much effort is put into the functionality of the service and how one negative review may initiate a domino effect and destroy the ideas and innovations for the project.

A purely functional organizational model, on the other hand, separates the worker from the overall management process, creating a severe gap between the top management’s vision of the service and its direct distribution. The only appropriate application of a functional organizational model is its manifestation in the cross-functional form, securing close collaboration between the functional units and branches (Bai et al., 2017). In the Uber context, the hierarchy is highly rigid, and such collaboration is almost impossible. For this reason, the integration of a product-based organizational model is more beneficial for the enterprise in the long term.

Undeniably, such mass transformations as changing the organizational framework and the patterns of employing hundreds of drivers cannot go without any complications. To begin with, the adaptation of a product-based model may trigger a series of obstacles, such as:

  • The rapid and mass expansion of the workforce, as each product presented by Uber, will now need to create its own management team, including duplicates of sales, operations, and other teams;
  • The unprecedented growth of rivalry among the divisions;
  • Focus on divisional goals rather than common organizational objectives;
  • Loss of control over every operation (Point Park University, 2021)

However, despite the existing drawbacks of the system, these aspects may be later turned into an asset for the company. Hence, the emergence of rivalry between the divisions can, in fact, encourage a competitive environment that yields better results and profits within each separate division. The loss of control, for its part, secures more freedom and responsibility for each division. Even if, in the beginning, the divisional team is rather confused with where to start, the mistakes they make bear a greater value than the mistakes done in the functional organizational framework. Indeed, if the mistake is made under the conditions of rigid hierarchy, there is a stronger chance that one division’s fault implicitly affects all the other divisions. However, once every division has its own financial and organizational team, the aftermath is not that critical for the rest of the teams.

The process of organizational redesign, despite some potential complications, contributes singificantly to the encouragement of innovation in the worplace, namely:

  • Product-based organizational model allows Uber Eats model of customer service to be sustantially different from other Uber branches;
  • The model presupposes the creation of a specialized IT devision in the management team, which allows for app innovations relevant to food delivery, such as the ability to order rom several places simultaneously;
  • Procuct-based model encourages the department to react more flexibly to the innovations presented by the rivaling companies.

The expansion of the workforce, however, may indeed become of challenging organizational, financial, and legal endeavor for the organization. In order not to lose stability, it is advised the management of the company undertakes the shift slowly, starting from the transformation of the functional departments and then launching legal procedures concerning the full-time employment of the drivers. In such a way, the process of driver specialization will be already divided between the legal and HR teams in the separate departments, and the workflow will be accelerated. Hence, taking all these possible complications into consideration, it is safe to assume that such a complex transformation will be worth the common effort in the long-term perspective.

Reflective Summary

The business paradigm of online food delivery services has now become an integral part of people’s lifestyle regardless of geographic location. Hence, the outbreak of the COVID-19 pandemic has contributed to the emergence of unprecedented homogeneity of the global market in terms of demand for food delivery services. However, despite the increasing relevance, such multinational businesses as Uber Eats still struggle to gain enough revenue to become profitable. It has been established over the course of this research that one of the fundamental reasons behind such dissonance is the money Uber Eats loses due to the growing rate of dissatisfaction and reputational damage. This dissatisfaction is also fueled by the fact that drivers, as independent contractors that receive no additional benefits from the company, are not motivated to improve the situation by quality service.

Hence, based on these indicators, it becomes evident that there is a demand for reconsideration of both driver employment conditions and the number of resources allocated to address customer satisfaction. Currently, at the peak of its relevance, Uber Eats should reconsider its profitability model and shift from a hybrid strategy of product differentiation and cost leadership to the former, as the costs are now perceived by the public as the payment for human and physical resources involved in their preparation. For this reason, extremely low costs for the service serve as a red flag for the company’s sustainability. Hence, it is now necessary for Uber Eats to realize its competitive potential through the focus on corporate social responsibility, product optimization, and a more welcoming employment environment.

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"Strategic Management & Leadership in Online Food Delivery." ApeGrade, 5 Apr. 2023, apegrade.com/strategic-management-and-amp-leadership-in-online-food-delivery/.

1. ApeGrade. "Strategic Management & Leadership in Online Food Delivery." April 5, 2023. https://apegrade.com/strategic-management-and-amp-leadership-in-online-food-delivery/.


ApeGrade. "Strategic Management & Leadership in Online Food Delivery." April 5, 2023. https://apegrade.com/strategic-management-and-amp-leadership-in-online-food-delivery/.


ApeGrade. 2023. "Strategic Management & Leadership in Online Food Delivery." April 5, 2023. https://apegrade.com/strategic-management-and-amp-leadership-in-online-food-delivery/.


ApeGrade. (2023) 'Strategic Management & Leadership in Online Food Delivery'. 5 April.

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