Olive Garden strikes a deal with Uber to deliver its food

By Jordan Valinsky, CNN

New York (CNN) — Once a holdout on offering delivery for the casual diner, Olive Garden is reversing course and will use Uber to deliver breadsticks and pasta.

Darden Restaurants, the chain’s parent company, announced Thursday an “exclusive multi-year delivery partnership” with Uber that will begin later this year at a limited number of Olive Garden locations and likely expand nationally to its more than 900 locations next May if the pilot is successful.

Olive Garden already offers delivery through its website and app for catering orders with a $100 minimum, delivered by the restaurant’s employees. Moving forward, the chain will outsource the delivery to Uber Eats drivers. However the restaurant still won’t be available on the the Uber Eats app and food can only be ordered on Olive Garden’s website and app.

“Guests have been asking us for home delivery options and they continue to show they are willing to pay for the convenience,” said Darden CEO Rick Cardenas in a press release. He added Uber was a “clear choice” for a partnership because it’s giving the chain guest data and insights that doesn’t hamper its “competitive advantages and simple operating model.”

Darden has shunned services like Uber and DoorDash in the past, saying that splitting the revenue with third-party service erodes the company’s profitability and the food isn’t delivered to its standards. Even during the height of the pandemic, Olive Garden didn’t use the services, although the services benefited their competitors.

Shares of Darden (DRI) jumped 9% in midday trading. The partnership likely alleviated some of the pain of a dismal quarter for Olive Garden, which reported a 2.9% drop in same-store sales for the quarter.

Since the start of the pandemic, chains have been hiking prices dramatically — partially because of increasing costs and partially because customers didn’t seem to mind spending more. But recently, diners have started to push back so restaurants started offering temporary discounts on those higher menu prices.

Olive Garden doesn’t offer many discounts, like its competitors do. Instead, its strategy has been to hold off on raising prices as much as it can, as well as bringing back promotions like its popular never-ending pasta deal earlier this year to help the chain’s bottom line.

Darden reiterated its full-year outlook and said sales across its brands, which also include Yard House, Ruth’s Chris and Longhorn Steakhouse, have improved in recent weeks.

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