Small-town Valley Eats food delivery service faces big-city Uber Eats

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Valley Eats, a Pembroke-based food delivery service focused on small Ontario towns, isn’t going to let Uber Eats eat its lunch.

On Wednesday, Uber Eats announced that it had expanded into 14 small towns in Ontario, principally in southwestern Ontario but also in Renfrew, Arnprior, Appleton and Braeside in the Ottawa Valley.

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Founded in 2019, Valley Eats brings restaurant food to hungry customers in more than a dozen communities from Deep River in the north of the Ottawa Valley to Smiths Falls in the south and Casselman in the east.

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The arrival of Uber Eats is “absolutely a threat. I can’t deny it,” Valley Eats president Ryan Schmidt said Thursday.

Uber Eats has deep pockets and will be “super-aggressive” in an effort to gain market share in rural Ontario, Schmidt said.

“Our biggest fear is because we’re an independently owned small business, we fear we can’t stay competitive,” he said.

Uber Eats will pour money into offering discounts and free deliveries to grow its business in rural Ontario, Schmidt predicted. Indeed, in a release, Uber Eats said it would waive delivery fees in Arnprior and Renfrew on all eligible merchants for a limited time.

Calling itself Canada’s leading food delivery platform, Uber Eats said it was twice the size of its largest Canadian competitor and almost three times the size of its third largest competitor.

Schmidt said Valley Eats will be able to compete as long as it continues to maintain good relationships with its couriers, customers and vendors.

“It’s all about trying to work with everybody. We try to be as good as we can with everybody,” he said. “We have to focus on being as quick and good as possible.”

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Schmidt said that in Valley Eats’ commission structure, its highest commission, 20 per cent, is equal to or lower than the lowest commissions that its rivals typically charge restaurants. Some restaurants that Uber Eats has tried to woo have told Valley Eats that they will stick with the Pembroke-based service, Schmidt said.

Valley Eats has 60,000 customers, more than 200 couriers and 300 restaurants, of which 80 per cent are independently owned, as opposed to chain or franchise operations, Schmidt said.

Valley Eats, he said, was already profitable within its first year, and has been profitable since then, although business really took off during the early days of the pandemic and has since leveled off.

In Canada, food delivery platforms have come and gone. Last August, the company Feastify, which delivered food in small towns across Canada, abruptly closed. Foodora, a food delivery service based in Sweden, came into the Canadian market in 2015 and by 2019 was making deliveries in Ottawa. But in the spring of 2020, Foodora filed for bankruptcy in Canada and exited the market.

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Schmidt said Valley Eats, which employs about 20 people in Pembroke, plans to expand beyond Ontario this year, and is exploring options in New Brunswick and Alberta. Valley Eats also wants to deliver groceries.

In the last six months, Uber Eats began delivering groceries for Metro, Walmart, Costco and Food Basics, and it said that 47 per cent of its users ordered groceries through its app in 2023.

Schmidt said his company will have to be cautious as it tries to grow. “We have to be very strategic. We need to be guerilla,” he said.

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