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Domino’s signed a global agreement with Uber.
Michael M. Santiago/Getty Images
Domino’s Pizza
was rising sharply Wednesday after the pizza chain signed a global agreement with
Uber
that will allow U.S. customers to order its products on
Uber
Eats and Postmates apps.
Delivery responsibilities, however, will remain with
Domino’s Pizza
(ticker: DPZ). The initial U.S. rollout of the deal will begin this fall in four pilot markets, the company said in a press release, and is expected to expand across the country by the end of the year. The deal is exclusive until at least 2024.
Domino’s (ticker: DPZ) was soaring 11% on Wednesday to $388.98, putting it on pace for its largest percent increase since 2021, when it rose nearly 15%, according to Dow Jones Market Data.
Uber Technologies
(UBER) fell 0.6%.
“Given certain customers only order their delivery from the Uber Eats app, this deal could make Domino’s available to millions of new customers around the world,” Chief Executive Officer Russell Weiner said in the release. The CEO told The Wall Street Journal in an interview that the chain and its operators aim to generate a billion dollars in new sales by listing menus on Uber’s apps.
“Domino’s will still be the face our customers see at the door, while Uber will be providing us with adequate data to understand delivery efficiency and incrementality,” he added.
An analyst team at RBC Capital Markets called the agreement “a positive step forward” for Domino’s, adding that it illustrates flexibility and willingness to make strides in its U.S. delivery business, which has struggled over the last several quarters.
The analysts also see opportunities for Uber. Domino’s has long kept delivery in-house, but depending on the success of this deal analysts said an expanded partnership—in which Uber provides delivery for Domino’s direct orders for a flat fee—wouldn’t be surprising.
Write to Emily Dattilo at [email protected]
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