Uber Eats app is getting a makeover with the removal of 'thousands' of redundant virtual brands

Thousands of online-only brands are being removed from the Uber Eats app this week as the platform becomes clogged with restaurants listing multiple delivery options with the same menu but different names.

‍

During the pandemic, so-called virtual brands—delivery companies without actual storefronts—sprouted on delivery apps, providing a lifeline for restaurants that exploited their vacant kitchens and idle personnel to test out new concepts and make up for lost sales.

‍

On Uber Technologies Inc.'s UBER -0.42% Uber Eats, there are now over 40,000 virtual brands, up from over 10,000 in 2021. They now make up 8% of the stores listed on Uber Eats in the US and Canada, but less than 2% of orders placed there.

‍

John Mullenholz, Uber Eats' business manager, describes the situation as a "Wild West, anything goes kind of situation" due to the explosion of online storefronts and the lack of regulations.

"Basically, the app allows diners to view 12 versions of the same menu," he said. “It’s fair to say that this kind of undermines consumer confidence in the application.”

‍

Uber Eats intends to shut down 5,000 online shops, accounting for 13% of North American virtual companies. 12 virtual brands selling the same breakfast burritos from a Colorado sports bar, 14 brands offering the same sandwiches from a New York City deli, and online-only options from a Pakistani restaurant in San Francisco that once duplicated its menu 20 times are among those that slated to be taken down. Names were withheld by Uber Eats.

‍

According to Mr. Mullenholz, the cuts target numerous websites that have duplicate menus while leaving the parent restaurant on the app.

‍

In a recent YouTube video, internet comic Eddy Burback channeled the anxiety by filming himself devouring nine fish sandwiches from ostensibly various brands. He claimed that the sandwiches were tasty but identical and came in the same checkered paper. In less than two weeks, the video has received more than 4 million views.

‍

Sam Brown, a student from New York City, age 22, noted that ordering through the apps can now be scary.

‍

When he typed "breakfast" the other day, he claimed that 20 eateries with the same menu virtually exploded in front of him. He went to a Starbucks instead.

‍

Some restaurants use this tactic to try to manipulate search results by listing various brands on the same menu, while others use it to draw consumers' attention to their extensive menu.

‍

According to Matt Newberg, the publisher of Hngry, a trade publication that examines how technology is reshaping the food industry, an Indian restaurant with a menu that includes everything from tandoori chicken to dosas might create multiple brands with the same menu but give each one a different name and lead image.

‍

“If the dosa concept is in the title, I might be more likely to click on it,” he speculated.

‍

Because there were no rules, restaurants were free to try different things.

‍

According to Mr. Newberg, "the industry is moving quicker than the platforms can keep up."

‍

According to Uber Eats, new rules will be implemented on Tuesday, requiring that a virtual brand's menu be at least 50% different from that of its parent restaurant and any other brands that are produced in the same kitchen. Also, it will be necessary for internet retailers to include images of five special menu items. With a stricter standard than actual restaurants, Uber Eats will remove virtual eateries whose average ratings fall below 4.3 out of 5 stars.

‍

Grubhub modified its policies earlier this month to track the number of brands that share a physical address as well as order and cancellation rates from virtual eateries. Late last year, DoorDash Inc. issued comparable rules, mandating that online businesses have distinct menus and include at least eight items, including sides and appetizers.

‍

Large chains including IHOP parent Dine Brands Global Inc., Denny's Corp., and Chili's owner Brinker International Inc. have employed virtual brands to target new diner demographics and boost revenue during off-peak hours. Because of the distinct menus of their online-only companies, they are not a target of Uber Eats' downsizing.

‍

According to the restaurant business, The Burger Den and The Meltdown, two of Denny's virtual brands, have helped draw in younger customers. Burger Den's sales tend to be for supper and late-night orders, and The Meltdown brand makes sandwiches with artisan bread, which sets both apart from Denny's main menu items.

‍

IHOP, which is well-known for its breakfast selections, operates the virtual brands Super Mega Dilla and Thrilled Cheese, which provide a variety of quesadilla and grilled cheese choices not generally offered at its outlets.

‍

Although many of its kitchens are now processing orders for its virtual brands during the slower lunch, dinner, and late-night hours, they are still quite busy in the mornings and on the weekends. The virtual brands' products are created by chefs using restaurant griddles.

‍

According to president Jay Johns, 1,300 IHOP restaurants offer virtual brands, up from 500 during the initial test at the beginning of last year. It launched a third virtual brand earlier this month called TenderFix, which offers chicken sandwiches and tenders.

‍

"Virtual brands don't only exist because people want them to. You need a comprehensive business case around it," according to John Peyton, CEO of Dine Brands, the company that owns IHOP.