When you read that Uber is reaching out to do even more with its app, and its drivers, you may be compelled to tap out “SMH.”
Is the company spreading itself too thin? How will it compete with other companies that are already doing this? How can the Big U possibly make this work?
But wait—before you dismiss the idea of groceries delivered by Uber, let’s think this through. You know Uber already has Uber Eats, which has drivers moving prepared food out to customers, who, in a state of COVID-19 shock, would rather not leave the house.
This business has grown like crazy lately; as much as 53% year-over-year, depending on who you ask.
Meanwhile, rideshare has not been doing so well. Always the mainstay of Uber’s business, rideshare was just begining to make a profit before COVID-19 hit. The shutdowns that resulted from the pandemic pushed passengers off the road, and that shut drivers out. Rideshare is rebounding to some extent, but it isn’t anywhere near being back to normal yet … and no one knows when that will happen.
Delivery has become a saving grace to lots of drivers. They found a source of income through driving for Uber Eats or one of the other delivery companies like DoorDash, Grubhub, or Postmates, the latter of which Uber recently acquired. Why wouldn’t grocery delivery also offer drivers more opportunities to earn?
Take a look at this video to see why we’re excited about Uber’s foray into grocery delivery.
In this article we’ll take a deeper look at the backstory of Uber’s next move, and what it might mean for us drivers, including:
- How Uber got into the grocery delivery business
- What the roll-out might be like
- Why this is a great thing for drivers
- Why Uber will play well in the grocery delivery game
Here we go!
How Uber got into the grocery delivery business
Uber’s decision to get into grocery delivery may be surprising to some of us, but the company’s been laying the foundation for a while now. In October 2019 Uber acquired Cornershop, a Chilean grocery delivery company that already had a working network throughout Canada and Latin America. So obviously this foray into grocery delivery started months before COVID-19 even existed.
Maybe Uber was prescient, or perhaps just lucky. In either case, the company now has a platform that it’s ready to launch in the United States, with Miami and Dallas being the first test markets. As grocery delivery becomes more profitable, Uber will likely move into additional cities and grow the service even more.
What the roll-out might be like
The initial phase might be more straightforward for customers than it will be for shoppers/drivers. Rather than being combined right away, the new operation will function as a very close partnership between Uber and Cornershop.
Customers will order their groceries from the Cornershop app, and drivers will need to sign up for Cornershop in order to deliver groceries for Uber. Check out this article to shed a little more light on how Cornershop and Uber will interact at the outset. This might make assessing and analyzing earnings a bit complicated, but we have ways of dealing with that. Let’s just say that downloading Gridwise would be a huge help as drivers will be able to track their earnings on Cornershop with Gridwise.
Uber will be eager to get drivers to sign up for its new grocery delivery service, so chances are they’ll make it easy for us to get involved. Also, it’s quite likely that once things get rolling, the apps will be combined and it will be less cumbersome.
Why this is a great thing for drivers
Uber’s move into grocery delivery will make it easier for drivers to adjust to the huge impact COVID-19 has had on the rideshare business. And while it’s definitely sad that rideshare has taken such a hit, sitting around, crying into a bag of Doritos and waiting for the business to come back probably isn’t a winning strategy.
Look at what’s happened so far. As states started to reopen in late May and early June, COVID cases shot up … and, unsurprisingly, many bars, restaurants, and gathering places that had started to come to life shut down again. This meant rideshare would continue to struggle, but it also meant the delivery business would remain rather brisk.
By the way … don’t let worries about not making enough money scare you from being a delivery driver. We’ve found that delivery drivers are making nearly as much as rideshare drivers did prior to COVID-19!
In case you’re fretting about the future of the delivery business in general after this pandemic mess, you don’t need to worry. Now that people have gotten used to the convenience of getting their meals and groceries brought right to their front doors, they’re going to continue to make this a habit in the post-COVID world.
Now, let’s list some of the benefits that drivers have to gain from Uber going into the grocery delivery business:
More demand for drivers
Uber might even do more for drivers as it courts and recruits them into this service.
More options for drivers
Now we’ll have a choice about what we want to do on different shifts, and at different times of the day.
Stimulation of the grocery delivery market
Uber’s entry into this market will stimulate the growth of grocery delivery, and offer more choices to customers.
Less risk to drivers’ personal safety
Most of the time, delivery entails far less risk of exposure to people who pose a threat to you.
Less vehicle expense
You’ll drive around much less with delivery, so you won’t need to buy as much fuel, and you’ll put fewer miles and less wear and tear on your vehicle.
Looser vehicle requirements
If you choose to be a delivery driver, you can work with a vehicle that is older or in less perfect shape than the kind you need for rideshare.
Multiple streams of income with a hybrid gig
By diversifying your own driving gig, you’re opening up opportunities to make more money!
Why Uber will play well in the grocery delivery game
Uber isn’t the only big company that’s doubling down on the grocery delivery business. Walmart and Amazon, either of which on its own would make Uber look tiny, are accelerating their efforts to win the hearts of consumers who’ve learned to love grocery delivery.
In fact, those companies and others have been wagering that grocery delivery would grow even before the pandemic-related store-to-door boom began. This CNBC article cites a February 2019 Bain & Co. survey of more than 8,000 U.S. grocery shoppers. The survey gave clear indications of grocery delivery’s anticipated future growth, as Bain & Co. partner Stephen Caine remarked: “We’ve been early adopters in this country in almost every other retail category. We know online grocery will explode at some point.” Yet neither he nor anyone else could have known just how “explosive” grocery delivery would become just over a year later.
At first glance it might seem foolish for Uber to even attempt to compete with mega-corporations like Walmart and Amazon, but it’s not. There’s a lot of controversy about what those companies have to offer. Walmart leads in brick-and-mortar representation, and is working hard to create a more formidable online presence—exactly what Amazon rules. Amazon is now working to build its own grocery stores to compete with Walmart.
Also, much of Walmart’s grocery business is curbside pickup. The company is pleased that its customers are spending more money in the stores, but they don’t get their groceries delivered. Hmmm … I wonder what kind of company would be able to do that more effectively?
Uber, that’s who! The company has a HUGE fleet of drivers, and an equally impressive number of customers who will be enthusiastic about ordering groceries through the same app they’re using now to order rides and food deliveries. The multiple monetization model is as good for Uber as the hybrid driving gig is for us drivers.
It’s fair to ask the question: What stands in the way of a customer ordering prepared food from one app, groceries from another, and sticking to Uber only for rides? And the answer is something all three companies are banking on—subscription agreements with their customers.
Uber’s been working with subscription models for a few years now. For example, a customer who’s got an Uber subscription (usually with a monthly fee) can get, among other perks, protection from surge pricing, discounts on Uber Eats fees, rate reductions on other services (bikes or scooters, where they’re still in operation), and advantages to using Uber for food deliveries.
Amazon Prime subscribers have many perks such as fast shipping and video streaming, and Walmart subscribers receive discounts and preferential treatment … but neither of them has the ability to include rideshare services or prepared food delivery in their subscription. This is why the grocery delivery venture could be such a smart move for Uber—and a real benefit to those of us who drive for them.
Will Uber ever get as big as Amazon or Walmart? Nobody knows. But for now, Uber going into the grocery delivery business alongside the aforementioned corporate giants might be indicative of the level of ambition and what kind of “brass” Uber’s got … in more than one sense of the word.
What do you think?
Now that you know we’re pretty pumped about Uber’s latest move into the grocery delivery business, we want to know your thoughts about it. Comment below or send us an email, and let’s get the convo going.
Also, like we told you earlier in this post, the days of being only a rideshare driver may be going by the wayside. So, as you add more services to your array of activities, you’ll need to download Gridwise to track your earnings, mileage, and deductions for each app you use.
The Gridwise app also gives you quick access to our amazing blog, and the incredible Gridwise YouTube channel. We’re always posting news that you can use to increase your earnings and make the job of rideshare and delivery driving easier and a little more fun.
No matter what, be safe out there. And remember … we’ve got your back.