Uber is launching an on-demand grocery delivery service in Latin America and Canada, the company announced Tuesday. It is Uber’s first major step into the competitive world of online grocery shopping since the acquisition of Cornershop, a leading online grocery supplier in Chile, Mexico, Peru, Canada, Brazil and Colombia.
Grocery delivery is available through both the main Uber app and the Uber Eats app. Customers will see that food delivery is available at local supermarkets and can receive their orders “within one to two hours,” said Uber Eats head of product Daniel Danker.
The service is available today in 19 cities in Latin America and Canada. It will be available in the US later this month, Danker said. And when it launches, it will be included in Uber, Rider Pass and Eats Pass subscription services, where customers can get free delivery on orders over $ 30.
The announcement also comes on the heels of Uber’s acquisition of Postmates for $ 2.65 billion. Uber is struggling to expand its food delivery options as the coronavirus pandemic continues to ruin its ride-hailing core business. At the height of the April pandemic, Uber said the ride-hailing division had fallen by about 80 percent. And as the number of cases increases in many parts of the U.S., the company’s losses may continue to increase.
“I think this would make a lot of sense in a pre-COVID world,” Danker said in a conversation with reporters. “But our world has just fundamentally changed. And this means even more of a huge responsibility for us. ”
It’s not hard to see why Uber pays so much on food delivery. The number of bookings with the company’s Uber Eats division rose by more than 54 percent year-over-year, thanks to increased demand for food deliveries, the company reported in May. Meal delivery has accelerated since mid-March, with annual growth of 89 percent in April gross bookings excluding India. But the company has also moved quickly to exit its unprofitable markets, recently discontinued its Eats operations in eight countries.
Uber is entering a busy field, with huge companies such as Amazon and Instacart seeking market share from major grocers such as Kroger and Walmart. And it is not an obvious money maker either. Last year, only 3 percent of groceries in the US went online. Sales are sure to increase during the pandemic – revenues from the US online grocery store hit one record $ 7.2 billion in June – but customers say they are reluctant to shop online for fear of overcharging or late delivery, according to a recent study.
Cornershop was founded in 2015 in Santiago, Chile. The company was almost acquired by Walmart for $ 225 million in 2018, but eventually by Mexican antitrust regulators blocked the deal, arguing that Walmart could not guarantee a level playing field for its rivals.