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MMs in Cost Savings, Increased Profitability, & Bottom-Line Growth through Operations Optimization.
Company, Location, Date, Project Information, Problem, Overview:
Company:
Uber Eats.
Location:
Los Angeles County Area, California.
World-Wide.
Date:
2021- 2022.
Project Information:
Project summary of consulting by Zak Glenn Allen for Uber Eats. The project is divided into two parts, top-line growth & bottom-line growth. This is the bottom-line growth portion.
Problem:
Closed restaurants/stores were still open and available to order from by customers using the Uber Eats app. This error resulted in excessive expenses for Uber Eats, lost revenues for restaurant/store partners, and lost time, money, and self-worth for staff/drivers. Additionally, closed restaurants resulted in excessive carbon monoxide exposure to the community with lines of vehicles around the block.
Current Solution:
Drivers were paid a restaurant closed fee between $3 to $7 per transaction dependent on location and restaurant to remedy the costs of accepting an order, driving to the restaurant/merchant, finding out the restaurant was not accepting orders or was not open, then contacting customer service to let Uber Eats know the merchant was closed.
However, the fee doesn't always cover lost time, energy, gas, wear, and tear, and potential revenues during prime-time surge and holiday wage opportunities.
Additionally, the same driver or another driver was sent to the same closed/not accepting orders restaurant to pick up the same order multiple times. Then they had to contact Uber Eats, customer service again to explain why the order couldn't be delivered (even on holidays).
Meaning these drivers and customer service representatives could be making time and a half at another job (holiday wages).
Opportunity Costs.
This problem was exacerbated because Uber Eats was not paid unless the delivery was completed. Thus, not only was the order not delivered because the store was closed or not accepting orders, but the order was resent to drivers sometimes multiple times for attempted delivery.
This inefficient and costly (time and resources) step resulted in additional wait times for customers, then disappointment with non-delivery, then a two-day to one week wait for a refund.
Uber eats customer service staff was constantly inundated by irate customers (wondering where their order was) and drivers who were standing in long lines on the phone with Uber Eats customer service at closed/non order accepting restaurants.
Overview:
Advised methods to streamline operations to optimize efficiency and effectiveness by eliminating workflow bottlenecks within the delivery and purchasing cycle (long lines of drivers at a closed/not accepting orders restaurant).
Additionally, advised customer’s funds to be refunded expeditiously in “verified” restaurant/merchant closed/not accepting orders. This best practice implementation is a proactive approach towards reducing processing times between the customer, Uber Eats and banks, while limiting costly “charge back fees” resulting in increased customer satisfaction, increased sales, and decreased costs.
If you are using a desktop or laptop to view this project, scroll all the way to the bottom of the page to view pitch deck items.
Results, Deliverables, & Recommended Solutions:
Results:
Millions in cost savings, increased profitability, and bottom-line growth through Operations Optimization.
Optimization led to MM increased sales revenues for Uber Eats (Uber Eats staff can work on higher value revenue producing tasks), drivers (more time on actual deliveries), partners/restaurants (increased sales), each item added MM towards strategic goal of profitability.
Deliverables:
Operations Optimization.
Process Management Review, Monitor, Evaluate, Revamp.
Recommended Solutions:
Partial Automation
Advised “partial software automation” that led to the elimination of redundant trips by drivers to restaurant closed/not accepting orders, resulting in reduced excessive restaurant closed fees paid out to drivers & unproductive wages (in line or on the phone with customer service), decreased driver turnover, increased productive wages & productivity rates (increased sales/decreased driver delivery times), improved competitiveness, enhanced cash flow, and removed unnecessary traffic congestion around closed/not accepting orders stores.
Restaurant Closed Fees
The restaurant closed fee should never be removed. This fee alerts Uber Eats about a problem with the delivery process. The duplicated/repetitive problem that caused the bottleneck was fixed, thus limiting the need to pay out repetitive, excessive fees. Once the bottleneck problem was fixed, then drivers were free to accept the next order.
Customers' funds, Uber Eats vs. Door Dash
Customers' funds were held by Uber Eats from two days to a week, if a purchase was made and the restaurant was closed or not accepting orders. In comparison, Door Dash was refunding customers immediately when business partners/restaurants were closed. This immediate refund allows the customer to purchase something else on Door Dash's menu, thus eliminating buyer's remorse that can occur a few days later, once Uber Eats refunded the customer's funds.
Customer Funds & Charge Back Fees
Advised customer’s funds to be refunded expeditiously in “verified” restaurant/merchant closed/not accepting orders. This best practice implementation is a proactive approach towards reducing processing times between the customer, Uber Eats and banks, while limiting costly “charge back fees”. The return of customer's funds increased sales, improved competitiveness, & enhanced Uber Eats' cash flow.
Cost Approximations Due to Problem:
Cost approximations Due to Problem:
(this reduces your profit margins):
*Calculations of total number of Uber Eats drivers are taken directly from Uber Eats business sales pitch for delivery drivers and restaurants/business partners, titled " Grow your business your way with Uber Eats (January 19, 2022). "For example, 3.5 million active drivers and delivery people use the Uber Eats platform, and the average delivery time is less than 30 minutes globally.
Drivers were paid a restaurant closed fee between $3 to $7 per transaction dependent on location and restaurant to remedy the situation.
Driver’s fees only cost approximation:
To understand the severity of the situation, I received at least 3 restaurant closed fees in one weekend. There are 52 weekends in a year. In 2021 there were 3.5 million active drivers and delivery people.
3.5 million drivers x One $7 closed restaurant fee = $ 24,500,000
3.5 million drivers x One $3 closed restaurant fee = $10,500,000
If only "ONE" restaurant closed fee in one weekend x 52 weekends=
$24,500,000 x 52 weekends in a year = $1,274,000,000 (at $7 fee).
$10,500,000 x 52 weekends in a year = $546,000,000 (at $3 fee).
If "THREE" restaurant closed fees in one weekend x 52 weekends=
$1,274,000,000 x 3 fees per weekend = $3,822,000,000 (at $7 fee).
$546,000,000 x 3 fees per weekend = $1,638,000,000 (at $3 fee).
Lost Sales Revenues=Customer's Funds on Hold
81 million users
900,000 supported restaurants
81 million x 1 average uber eats order
at $28 per order = $2,268,000,000
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