Dive Brief:

• Domino’s will begin offering delivery orders through Uber Eats and Postmates in four U.S. markets this fall, before expanding the partnership across the U.S. by year’s end, the companies announced Wednesday. The deal makes Uber Eats the exclusive third-party delivery partner of Domino’s through 2024.
• Customers will still be able to use Domino’s Tracker to follow their order’s journey, and Uber One and Postmates Unlimited members will receive free delivery on orders placed through Uber Eats and Postmates. Domino’s loyalty program, however, will still only be offered through its e-commerce platforms.
• The deliveries will be completed by uniformed Domino’s drivers, meaning the deal is more likely to boost incremental sales than to relieve pressure on the pizza chain’s delivery workforce.

Dive Insight:

The Uber Eats deal may give Domino’s access to “millions of new customers” who are loyal to Uber Eats, Domino’s CEO Russell Weiner said in a statement, which could boost the chain’s traffic. 

The partnership will eventually expand to the 27 international markets where Uber Eats and Domino’s overlap, which should allow customers to order Domino’s through Uber Eats at about 70% of the chain’s global system, according to a press release. 

Given that Domino’s is still maintaining control of the delivery process, the Uber Eats partnership is, for now, just an additional ordering channel. While the pizza chain’s competitors have embraced third-party delivery, Domino’s has made a number of changes to strengthen its delivery business.

Last summer, the company began offering increased scheduling flexibility for drivers in hopes of improving retention, and shifted much of its delivery order processing to call centers rather than in-store phone systems to boost efficiency. In November, the chain began adding 800-plus electric vehicles (later expanded to 1,000 per its Q1 2023 earnings call) to its delivery fleet to improve sustainability and draw workers who do not own personal vehicles. 

By contrast, rival Papa Johns saw third-party delivery orders as a key buoy to its sales last year. Domino’s, however, saw delivery sales declines in 2022, and sales were still pressured coming in to 2023.   

Delivery times at Domino’s improved by about one minute in Q1 2023 versus Q1 2022, Weiner said on Domino’s Q1 earnings call. The chain still has a way to go before reaching 2019 delivery service levels, though. Same-store delivery sales fell 2.1% in Q1 2023 year over year, Domino’s CFO Sandeep Reddy said on the earnings call. Reddy attributed that delivery decline to constrained household budgets and a gradual reversion of customer behavior towards pre-pandemic norms.