Domino's is adding new order options through a partnership with Uber Technologies, the pizza delivery giant announced early Wednesday. DPZ stock bolted higher, while Uber shares made more modest gains Wednesday.
In an effort to compete with pizza sales from mobile app orders, Domino's teamed up with Uber to list its menu on the ride-sharing company's Uber Eats and Postmates delivery apps. According to the announcement, Domino's drivers will still deliver food ordered through Uber Eats and Postmates.
The rollout will begin this fall in four pilot markets. Domino's expects to have the service nationwide by the end of the year.
"The next logical marketplace for us to enter is order aggregation," Domino's Chief Executive Russell Weiner said in the release. He added that "using the Uber Eats Marketplace provides access for Domino's and its franchisees to a new segment of customers and what we believe will be a meaningful amount of incremental delivery orders once it's widely available."
Last year, the company started offering customers a $3 credit for choosing carryout options on online orders. The promotion ended in the spring.
Domino's and Uber Eats share 27 international markets. And the agreement could bring incremental orders from Uber Eats to 70% of Domino's stores worldwide, the pizza chain said. Uber Eats will be the exclusive third-party platform for Domino's until at least 2024.
Domino's franchisees that currently partner with Uber outside the contract will be able to transition to the new global agreement before the end of the year. The company will assess its international markets that do not partner with Uber Eats for the transitioning process this year.
DPZ Stock Up By Double Digits
DPZ stock bolted 11% to 388.59 Wednesday following the announcement. Meanwhile, rival Papa John's International, which started partnering with third-party mobile apps like DoorDash in 2019, pared losses after retreating 4% in early trade.
UBER stock edged higher and climbed 1.7% during premarket trade. Shares are near a profit-taking zone after spiking 18% following a May 3 breakout from a cup base. DASH stock rose1% Wednesday. DoorDash shares are in their own profit-taking zone for a cup-with-handle base following a May 5 breakout.
Shares of both Domino's and Papa John's are both in long-term consolidations, but DPZ appears to have an advantage in recent performance.
Papa John's advanced about 13% from its low of 67.92 from June 1. But PZZA shares are well below their 2023 high of 97.78 from February 16.
Domino's shares are up about 22% from their late-May low of 285.84. DPZ stock is trending toward its 2023 high of 369.97 from early February.
You can follow Harrison Miller for more stock news and updates on Twitter @IBD_Harrison
