Uber changes grocery delivery business to meet competition

Uber is overhauling its grocery delivery to better compete with Amazon, Instacart and others.

The ride-hailing giant said that starting now, its formerly “far from perfect” grocery delivery option on the Uber Eats app will come with a suite of new features, including shopping when stores are closed, live order-tracking and easy substitutions.

The updates will roll out across markets during the summer, the company said.

For people at home, that means Uber Eats grocery will get some of the same visibility recognized from Uber’s ride-hailing app.

You can watch your shopper move through the process and even see which items they’re scanning, said Therese Lim, the company’s senior director of product for grocery and new verticals.

If a particular item isn’t available, the steps to pick out a substitution will be easier than other grocery apps, she added.

When Uber started delivering groceries two years ago, it tried to make the experience “as fast as possible, maybe not as great as possible,” said Oskar Hjertonsson, the company’s global head of grocery.

The setup was relatively bare bones – you couldn’t order items by weight, such as steak by the pound, for instance. But now, the company is “betting in a huge way on grocery,” Hjertonsson said.

The announcement comes on the heels of an international investigation by The Washington Post and other publications into Uber’s company practices.

What emerged was a picture of Uber’s aggressive expansion into cities around the world – at times at the expense of its drivers.

The company also pushed the boundaries of local regulations and sentiment with the help of big-name politicians and media organizations.

Meanwhile in the United States, some riders have reported high prices and long wait times for Uber’s ride-hailing service after the company experienced driver shortages during the pandemic.

Of course, the success of Uber’s grocery efforts will depend in part on the availability of drivers to shop and make timely deliveries.

Lim said the company continues to grow, and the focus on grocery won’t come at the expense of ride-hailing.

Uber “doesn’t anticipate” any problems with driver availability, she said, but she declined to comment directly on whether Uber is experiencing a driver shortage.

Uber’s grocery expansion comes as people juggle grocery-delivery options from Gopuff to Walmart to Amazon Fresh.

To stand out, Uber may have to court older shoppers and people who prefer to buy online and pick up at the curb or in store, said Kassi Socha, a director analyst at market research company Gartner.

According to a Gartner survey from January, 24% of respondents had used a delivery service in the past three months, 27% had ordered online and picked up in store, and 25% had picked up curbside.

Lim said Uber is “absolutely exploring” pickup options but has nothing to announce.

“Uber and the other aggregators often combine different types of products now – restaurant deliveries, other stores like Sephora and anything else they can transport,” said Sucharita Kodali, a vice president and principal analyst at market research company Forrester.

Lim said people should be able to order “anything” from toilet paper to a coronavirus test to a bag of Doritos.“The costs of deliveries are still expensive,” Kodali said. “Consumers don’t want to pay what it costs, and drivers are more expensive than ever as well.”