Domino's Pizza stock jumps on delivery partnership with Uber

Domino's Pizza shares are surging this morning after announcing a food delivery partnership with ride-share giant Uber. Yahoo Finance Live examines the performance of food delivery service providers.

Video Transcript

BRAD SMITH: Let's take a look at shares of Domino's Pizza here, as we're getting the mimes in full motion here this morning. The stock moving higher after the pizza chain announced it's teaming up with Uber on its delivery orders. US customers will be able to purchase Domino's pizza products through Uber Eats and Postmates.

Now, the agreement has been set to roll out this fall. Take a look at shares of Domino's Pizza here this morning, moving higher by about 12%.

And for Domino's, one of the companies that was very early on in its technological acceptance of how they could engage with consumers, whether that be through their own website at first or making sure that they had an app experience or even being one of the first pizza chains where you could tweet to order.

I think they've been very advanced in how they're making sure that they take on data, but also how they're engaging with consumers. I think, though, that this is an admission that they can't do it alone.

JULIE HYMAN: Right, exactly. They have been basically the last holdout. The other major pizza chains already work with the external delivery companies. And Domino's was holding out here. So it's quite interesting that indeed they have said, OK, now we're going to do it.

There were some interesting data that "The Wall Street Journal" put in its story today, citing a research firm called Sarkana. They said Uber DoorDash, other apps that people use for delivery accounted for 14% of pizza sales in the year ended the end of May. So, you know, people are-- you know, while Domino's is definitely doing its own thing, that's 14% is a decent chunk of pizza sales.

BRAD SMITH: I wonder of that percentage, what is representative of the large chains, the US national chains versus some of the mom and pop shops because in New York, we got a lot of great mom and pop shops. Rocco's Pizza. But, you know--

JULIE HYMAN: Jersey has them too, I got to say.

BRAD SMITH: Jersey got them too. But, you know, you get a good grandma slice in New York. I don't know if you can get the same thing from some of these national chains. And it'd be interesting to know where consumers continue to flock to because there are for the chains a lot of the propensity or the ability to make or drive huge promotions.

Their marketing businesses that then have different franchisees underneath of them versus some of the local shops that are really just trying to make sure that the deals that they're offering are not going to cannibalize perhaps their profits at the end of the day, while still trying to make sure that there are add-on purchases that consumers are making when they're buying.

JULIE HYMAN: You know who can ask?

BRAD SMITH: Who's that?

JULIE HYMAN: Slice. Slice is pizza delivery app that works with a lot of moms and pops.

BRAD SMITH: I got to try that one.

JULIE HYMAN: Yeah, do that.

BRAD SMITH: Into it. We're going to order right now, guys. Let us know your order.