Chad Dunbar commented on a stock · Sep 20 15:21

I’m glad for those who gained on their positions, but I don’t believe the hype will last…

$Darden Restaurants (DRI.US)$ I don’t see a partnership with Uber Eats as a game changer. Uber Eats does far less volume than DoorDash, and doesn’t have separate delivery zones within a city, so drivers get pulled back and forth across town. This makes the deliveries take longer. They temporarily leaned into food delivery during the shutdown in order to survive, but they never truly committed to it. They went back to being a ride share company that occasionally drops off burgers along the way, rather than a true competitor in food delivery.

Also, Uber has all but destroyed the companies it has merged with. Delivery drivers picking up Postmate orders are an endangered species. Caviar is dead and its clientel doesn’t seem to have stuck around for Uber Eats. This isn’t going to move the meter that much. Also, volume is down for delivery apps across the board. Their increased profits come from clipping both the customers and the drivers, in addition to the restaurants. There is only so far that they can do this before the gig app business model deteriorates.

Darden should focus on making Olive Garden better. That would move the needle more…

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Chad Dunbar

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