Olive Garden tests Uber delivery to combat falling sales

Diving certificate:

• Darden Restaurants has signed a multi-year exclusive agreement with Uber to offer deliveries from Olive Garden restaurants, the company said before the earnings meeting Thursday.
• Some Olive Garden locations will offer the delivery option starting in late 2024, the press release said.
• Darden will offer delivery through Uber Direct – the technology company's white-label delivery service – and customers will be able to order through Darden's restaurant channels, including its apps and websites.

Diving insight:

The delivery program will launch in just five or six Olive Garden restaurants to test the technology, Darden CEO Rick Cardenas said at the company's first-quarter 2025 earnings call. The test will then expand to about 100 restaurants, or about one-ninth of Olive Garden's U.S. system, for the remainder of the pilot phase.

Depending on the success of the market tests, Darden will launch Uber Direct in the brand's approximately 900 company-owned stores in the U.S. by May 2025. The white-label service will allow the restaurant giant to store valuable consumer information generated by Uber delivery transactions.

The companies began discussing that option in April 2024 before working on system integration in May, Cardenas said in the call.

Cardenas said in the press release that Uber's “investment in customized integration, commitment to Olive Garden's growth in first-party delivery, and efficiency and speed on a national scale made this exclusive partnership a clear decision.” The delivery deal will not significantly disrupt restaurant operations, he said in the call, and Olive Garden will continue its catering service for bulk orders.

Not all of Darden's brands will be available immediately, Cardenas said, and the new additions will be determined on a brand-by-brand basis. Darden will continue to use its capacity management tools to prevent restaurants from becoming overloaded.

Cardenas said menu prices for delivery will be the same as other ordering channels. Instead of setting separate prices for delivery, the company will charge a delivery service fee or a series of fees that are transparent to the consumer.

Although it will take time to build up sales through the channel, Darden can use all the help it can get from Olive Garden. Darden's flagship brand saw Sales decline in comparable restaurants by 2.9% For the quarter and across all brands, the company's comparable restaurant sales decreased 1.1% compared to the same period last year.

White label delivery is an attractive option for well-known restaurant brands as orders continue to come through their own channels. Last year, White Castle launched a similar agreement with Uber.