There is also the threat of Amazon, which has tried food delivery in a few markets. The Seattle retail giant’s recent acquisition of Whole Foods provides hundreds of potential bases for drivers to pick up prepared food for delivery in major urban areas, where takeout orders are popular.
“The number-one concern for all of these delivery companies is Amazon,” said James Cakmak, an analyst at the equity research firm Monness, Crespi, Hardt & Company who follows the food delivery space. “How could Amazon use its network to crush our business? They have the logistical network and the balance sheet to be able to compete on the price side with all of these players.”
Matt Maloney, the founder and chief executive of Grubhub, said his company’s focus on food orders set it apart.
“Uber has built a great company focused on black car service and human transportation, but succeeding in food delivery is a different game,” Mr. Maloney said in a statement. “We are known for one thing only — takeout ordering — and we have engineered our entire product around this purpose.”
Both Amazon and Postmates declined to comment on UberEats.
Uber first dabbled in food delivery in Los Angeles in 2014 under the name UberFresh, offering prepackaged lunches and dinners from restaurants. Uber also tried other experiments, like UberEssentials, a way to deliver pantry and drugstore items quickly.
“If you can hit a button and get a car in a few minutes, what else can you get in a few minutes?” Mr. Droege said.
But the situation wasn’t ideal, with drivers usually carting food around in a safe storage container in their car trunks. That led to issues with food quality, and customers were unhappy when their food arrived cold. People also wanted a greater selection of restaurants, something that competitors like Postmates provided.
In December 2015, Mr. Droege’s division introduced a separate app, UberEats, in Toronto, working with restaurants to provide freshly cooked meals that could be ordered with a few touches of a smartphone button. The service took off, and over the next 18 months UberEats expanded its sales force to…