Uber Launches a Grocery Delivery Service in South America & Canada, Will Soon Launch in the U.S.

author: Derrick Smith   

While the coronavirus pandemic has decimated Uber's core ride-sharing business in the past several months, the company was already looking for new sources of revenue. Although demand for ride-sharing has fallen significantly due to the pandemic, Uber's food delivery business Uber Eats is one bright spot. The platform has experienced rapid growth over the past year, even before the pandemic.

Now just one day after ride-sharing giant Uber announced its acquisition of delivery company Postmates for $2.65 billion, the San Francisco company announced that its launching its first grocery delivery service in South America and Canada. 

Beginning today in collaboration with Uber's partner grocery delivery partner Cornershop, customers in select cities in Latin America and Canada can order groceries through both the Uber and Uber Eats app.

Following the launch with Cornerstone in Brazil, Chile, Colombia, Peru and Canada, Uber plans to roll out new grocery delivery features for customers and merchants in the U.S., as well as other cities around the world over the next few months. 

Uber announced that its grocery delivery service will soon be available in Miami, FL and Dallas, TX. In the two cities, Eats Pass and Uber Pass members will receive an additional benefit, free grocery delivery on orders over $30. 

Eats Pass is a Uber Eats monthly subscription that costs $9.99 per month. Subscribers get free delivery and 5% off all Uber Eats orders over $15. The benefits apply to all restaurants on Uber Eats in the U.S., according to Uber.

"Over the last six months, it's become increasingly clear that grocery delivery is not only popular, but often a necessity. We expect to see this trend continue as people across the world look for new ways to save time and stay safe," Uber wrote in a blog post.

When a customer places a grocery order through the Uber app, a Cornershop team member will fulfill the order and deliver it right to the customer's door.vUber provides real-time tracking via its app, so delivery customers always know the status of their delivery until it arrives.

Uber said the launch of its grocery delivery service launch comes after much testing amid rising demand for food delivery since the coronavirus pandemic began four months ago.

Uber said it's experiencing explosive demand for its food delivery service, with orders increasing by 197% since March. So far, Uber has partnered with around 9,500 merchants to deliver groceries across 35 countries via its Uber Eats platform, the company said.

The new grocery delivery option is available right from the Uber app.

Uber is Expanding its Offerings

With its new grocery delivery service, Uber is expanding its offering and becoming more than just an on-demand transportation provider. The company plans to offer the software that powers its vast ride hailing network to help cities make their public transportation offering more efficient.

On July 1, Uber kicked off a pilot program with public transit agencies in Marin County, just north of San Francisco. Marin Transit and the Transportation Authority of Marin are paying Uber a flat monthly subscription fee for access to the software that powers Uber's ride-hailing platform. 

The program is called "Marin Connect." Residents of Marin will be able to book rides on the city's public transit passenger vans directly from Uber's smartphone app. The app will match riders travelling in the same direction. 

Uber is also working with the city of Denver, Colorado. Residents of Denver can use Uber's app to purchase tickets for the Regional Transportation District (RTD), which operates the city's buses and trains. Purchasing transit tickets via Uber costs the same amount as through existing options, the company said. 

The new grocery delivery service is part of Uber's efforts to diversify its offerings and find a path towards profitability. Since becoming a public company last year, the company has posted huge losses in its core ride-hailing business. Uber posted a loss of nearly $3 billion in the first quarter of 2020, despite a big increase in revenue from Uber Eats.

Uber stock is up just over 1% closing today at $32.82. A year ago, shares were trading around $45.00, but have never risen higher than $45.63 since its IPO on May 10, 2019.

Uber's market cap remains around $56.9 billion.  

Derrick Smith