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Five Big Milestones Mark Uber’s March From Rides To Logistics

Uber is in the news again this week after announcing plans to double up on grocery delivery via a new partnership with supermarket chain Albertsons that will add 1,200 stores to its platform. As a result, Uber Eats will now be available in 400 U.S. towns and cities, an expansion that more than doubles the platform’s grocery capabilities.

According to Uber CEO Dara Khosrowshahi, the deal puts the company’s food delivery division on track to become a $50 billion entity that will exponentially eclipse its original core ridesharing business. The development marks the latest step in a perpetual evolutionary process that has been happening at the San Francisco-based company since its earliest days.

Catalyzed by COVID and the many lifestyle changes it demanded, Uber has reinvented itself again and again — especially over the past 18 months — as it migrates toward its original mission of becoming a global logistics company at the center of the “bring it to me” economy.

Here are five key changes that have paved the way for the Uber of tomorrow:

1. Expanding Delivery Ambitions

While Uber’s hard shift from ridesharing to delivery is most notable in the context of the pandemic, it is important to note that Uber’s ambitions predate COVID-19 — and, in fact, even predate Uber’s 2019 IPO. As of October 2018, the firm was already touting its delivery ambitions.

But Uber wasn’t interested in merely delivering goods to consumers — flash-forward three years to spring of 2021, and Uber was actively talking about expanding the range of what types of things it will deliver to customers’ doors. As of January of this year, for example,  Uber had announced a partnership with prescription delivery service Nimble.

2. Branching Into Business Deliveries

Uber’s march toward delivery logistics hasn’t only changed what it is delivering, but who it is delivering to. Last April, the firm launched its food delivery service for business globally as an expansion of Uber for Business.

Initially piloted in 2018, the firm decided to speed the global launch due to increased demand created by a legion of workers when businesses began having employees work from home. 

3. Acquiring Its Way to a C-Store Footprint

In May, Uber announced a new partnership with convenience store innovation start-up Gopuff designed to allow Uber Eats users to order household essentials through its app. The partnership went on to launch 95 cities in June, with national expansion promised by the end of the summer. Uber Pass and Eats Pass members will face no delivery charge on all Gopuff orders over $15. Uber said the result is that residents in more than 100 cities and towns in 20 major U.S. metros can now have groceries delivered through the Uber and Uber Eats apps.

The Gopuff partnership followed Uber’s 2020 $2.7 billion acquisition of delivery logistics startup Postmates by about a year, which upped Uber Eats’ market share in the delivery market to roughly 37 percent from the 29 percent it held at the time of the question — a move that singlehandedly placed the combined entity within sight of Doordash’s 44 percent U.S. market share.

4. Achieving Global Grocery Goals

And while its Postmates acquisition and Gopuff partnership point to Uber’s C-store and grocery ambitions here in the States, its June purchase of Chilean grocery delivery startup Cornershop demonstrates that its ambitions are global, not just local. The deal closed this month.

Uber first announced its interest in acquiring a stake in the Santiago-based Cornershop in October 2019, but the deal first needed the approval of officials in Chile and Mexico. Chile’s National Economic Prosecutor (FNE) had initially launched an investigation into the deal out of fears that Uber’s purchase of the Cornershop app would hinder online delivery competition, but ultimately concluded that the purchase would not affect competition. Mexico signed off on the deal earlier this year.

Uber has said its intention to leverage this deal into international grocery delivery capacity, and that it intends expand beyond Mexico, Chile, Canada and Peru and into other regions around the world.

5. Uber’s Move Into Booze With Drizly Buy

Uber announced earlier this year that its intention to acquire alcohol delivery logistics platform for $1.1 billion. Under the deal, Drizly’s platform will be folded into the Uber Eats app, but the standalone Drizly app will still be available.

CEO Dara Khosrowshahi noted at the time that although Drizly’s growth was rapid, they grew in the right way, and that its team-up with Uber will further cement its lead in the alcohol delivery sector. At the time of the acquisition, Drizly was the leading on-demand alcohol delivery service and was available in 1,400 cities.

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