Uber Eats Tests Native Ads, Will This be a Powerful Tool for Operators or a Hassle That Will Cut into Profits?

The food delivery platform Uber Eats has been quietly testing a new feature on its app in India.

Uber Eats has been experimenting with native ads where restaurants that offer promotions like a bundle of a few food items for a discount gets the restaurant promoted placement in the app.

With a new section called "Specials," Uber Eats is even paying some of the restaurants to offer these discounts.

"We’re always experimenting with ways to make it easier to find your favorite foods on Uber Eats," said an Uber spokesperson in a statement.

"The feature allows restaurants to create a bundled meal at a certain price point, such as a chicken sandwich, french fries and a drink at a price that’s less than the sum of its parts," writes "Tech Crunch."Attracting more customers that have plenty of other options could offset the discount. Businesses could also use it to bundle high-margin items, like soft drinks, with meals, or to get rid of overstock."

Learn more about the impact of Uber Eats' promoted placements on restaurants in the recent episode of The Barron Report above. Host Paul Barron argues that Uber Eats has become a pricy partnership for operators and these specials will only allow Uber Eats to make even more profit from restaurants.

Uber Eats has emerged as one of the most popular delivery services out there. This company has quickly conquered the market and is currently offering food delivery for 50 percent of the U.S. population and has the lofty goal of serving 70 percent of the U.S. population by the end of this year.

But as the platform becomes more saturated with restaurant options, it has become more difficult for restaurants to be seen on the delivery app. So restaurants have tried to reach more eyeballs with quicker delivery times since the delivery times are featured as specific categories on the app.

But now will restaurants be forced to compete by offering better specials?

"Users often come to Uber Eats and its competitors without a specific restaurant in mind. Uber can then point those customers to whichever food supplier it prefers. The suppliers in turn will increasingly compete for the favor of the aggregators — not just in terms of food quality, speed and review scores, but also in terms of discounts," writes "Tech Crunch."The aggregators will win users if they offer the best deals; creating a network effect makes restaurants more keen to play ball."

Not to mention, partnering with Uber Eats has become much more expensive.

Will operators be open to offering native ads on the platform to get more delivery orders? Or is this function just adding to the hassle of partnering with Uber Eats?

Read more about the ad test at "Tech Crunch" now.