Restaurant chain Olive Garden partners with ride-hailing service Uber for food delivery services.
Olive Garden's parent company, Darden Restaurants, declared a "unique, multi-year partnership" with Uber on Thursday, commencing later this year at select Olive Garden outlets, with possibilities of national expansion to over 900 locations in May 2023, if the trial phase proves successful.
Currently, Olive Garden provides delivery through its own website and app, handled by the restaurant's staff. However, this service is set to transition to Uber Eats drivers. Despite the change, Olive Garden will not be accessible on the Uber Eats app, and orders can only be placed via Olive Garden's digital platforms.
In a press release, Darden CEO Rick Cardenas stated, "Guests have been requesting home delivery options, and they've demonstrated their readiness to pay for the convenience." He further added that Uber was their preferred partner due to the data and insights it could provide without compromising their "competitive edge and straightforward business model."
Previously, Darden had been hesitant to collaborate with services like Uber and DoorDash, citing revenue sharing and delivery standards as concerns. Even during the peak of the pandemic, Olive Garden opted against utilizing these services, although they benefitted their competitors.
Postmarket trading saw a surge of over 9% in Darden shares (DRI) as a result of this partnership, potentially easing the strain of a challenging quarter for Olive Garden, which reported a 2.9% decrease in same-store sales for the period in question.
Since the onset of the pandemic, several chains have been escalating their prices significantly — partially due to increased costs and partially due to a lack of customer objection. However, recently, diners have shown signs of resistance, prompting restaurants to introduce temporary discounts on the elevated menu prices.
Unlike its competitors, Olive Garden has maintained a limited approach to discounts. Instead, its strategy has involved postponing price hikes as much as feasible, as well as reintroducing promotions like its popular never-ending pasta deal earlier this year to bolster its financial performance.
Darden reaffirmed its full-year outlook and reported improvements in sales across its brand portfolio, which also comprises Yard House, Ruth Chris, and Longhorn Steakhouse.
In this collaboration, Uber Eats drivers will take over Olive Garden's delivery service, as the business aims to enhance its home delivery options based on customer demand and readiness to pay for convenience. Furthermore, Darden views Uber as an ideal partner due to its data capabilities, ensuring they maintain their competitive edge and straightforward business model.
