UberEats Expansion Could Hurt Yelp

Uber will be competing with Yelp's Eat24.

UberEats is diving deeper into the food delivery market, and if it's successful, the service will have to put a dent in another company's business. Which delivery start-up might take a hit? It may be Yelp's Eat24, according to Market Watch.

"Our concern is from deep pocketed, win-at-any-cost competitors such as Uber and [Amazon]," a Wall Street analyst wrote. Market Watch notes that pressure could drive Yelp to increase advertising for Eat24, along with advertising for its own core business, which will hurt its operating leverage.

Amazon has been rolling out its own delivery service in cities across America, most recently launching in Baltimore and Austin. UberEats, which started as a lunchtime niche for business-types, will soon become a direct competitor to Eat24, GrubHub, Postmates, and more. The expansion will begin in the 10 cities that currently have UberEats, but the company expects to move into new cities in the near future.

Uber first tested its updated delivery venture in Toronto last month. The new UberEats will be available in Washington, D.C., San Francisco, Atlanta, Houston, Seattle, Dallas, Los Angeles, Chicago, New York, and Austin in March.

Yelp acquired Eat24 for $134 million last February. In July, Eat24 drivers filed a class action lawsuit against the online review giant, alleging Yelp was withholding tips. The company denied any wrongdoing.

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