Domino's Pizza customers may soon be able to order dinner on the Uber Eats app. Domino's stock jumped on the news that, for the first time, its teaming up with an outside delivery partner. Yahoo Finance Live discusses what this partnership means for the company.
Video Transcript
PRAS SUBRAMANIAN: I'm looking at a shocker in the food space. Domino's teaming up with Uber Eats of all partners here, looking to get into the third party delivery game. Now, this is different-- it's interesting because Domino's has traditionally been kind of reliant on their own services, first time here going with third party delivery services. Uber Eats is going to be the exclusive delivery partner starting in 20-- at the end of this year and in through 2024.
Now, a couple changes here, you can actually track the Domino's tracker in the Uber Eats app, so people will get used to that. And the people delivering the pizzas will actually be wearing Domino's delivery outfit. So I thought that was interesting. But anyway, kind of funny that they're doing that now. I think it's kind of weird, because they're still using the Domino's delivery people, but they're using the kind of logistics app for Uber.
JOSH SCHAFER: You can feel the friction, right, that Domino's doesn't want to fully give away what has been a traditionally strong part of their business, right? I think a lot of people know Domino's for delivery, right? They know him for that old 30-minute-- what was the 30-minute limit they had at one point. If they didn't come in 30 minutes, you got your pizza free or whatever the deal was.
But for me, I think this is a massive move for Domino's in the sense of I'll play the Gen Z card here. A lot of my friends either have never called in a pizza or didn't spent a lot of years calling in a pizza before we got smartphones, and we ordered on apps. And the way I use apps here in New York City and a lot of my friends use apps is you just go on the Uber Eats app to look for something to eat rather than seeking out a restaurant.
ALEXANDRA GARFINKLE: Josh There's a Domino's app.
JOSH SCHAFER: Right. But you go on-- you go on Uber Eats. You go on Uber Eats.
ALEXANDRA GARFINKLE: I have-- I need to update it.
JOSH SCHAFER: Yeah. It's not updated, so you haven't used it in a while well. And--
ALEXANDRA GARFINKLE: I do use it, though.
JOSH SCHAFER: But you DoorDash, don't you?
ALEXANDRA GARFINKLE: I don't DoorDash Domino's. I go right through the app. Well, yes. But what I'm saying--
JOSH SCHAFER: That's my point.
ALEXANDRA GARFINKLE: I-- my argument is that it's very easy to use a Domino's app. You can see where it's going. You get those loyalty points, like, I just feel like-- I understand why they were hesitant, because sometimes with Uber Eats and some of these third parties delivery services, your food can come cold, it can come late. They had control over all of that. And it showed in their earnings. And it showed in the results that they had.
JOSH SCHAFER: I think if you want to build your customer base, though, you have to get beyond your own app right now, because your own app--
ALEXANDRA GARFINKLE: Maybe that's the reason why they're doing this.
JOSH SCHAFER: Right.
ALEXANDRA GARFINKLE: Yeah.
JOSH SCHAFER: If you only have your own app, only people that have had Domino's pizza are likely to download that app.
PRAS SUBRAMANIAN: Right.
JOSH SCHAFER: When you get on Uber Eats, someone can find a deal that they didn't know existed and get attracted to Domino's, which I think is a good part of this partnership.
PRAS SUBRAMANIAN: Apparently, Domino's is losing out in the delivery game, losing actually fewer deliveries quarter over quarter. And then they saw Papa John's kind of seeing more deliveries with third party apps, so they had to kind of go in there and meet them where they're at. But I think the issue also is that you're getting less money from your deliveries if you're going third party, so how do you make that up? So maybe they'll offer people, like Allie, some deals on those pizza.
ALEXANDRA GARFINKLE: I hope so. I love Domino's. And I'm a big fan of them.
