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On Demand Businesses 101

Uber Moves to Grocery Delivery post $5Bn Loss

It’s a go big or go home conundrum.

According to The Financial Times, Uber Eats held a “bright spot” relative to otherwise disappointing results with a net $5.2Bn quarterly loss. Uber’s revenue from it’s core business ride-hailing grew by just 14 percent, which has been the smallest on-record quarterly increase. 

However, Uber Eats’ user base saw a 140% increase as compared to the previous year in the second quarter. Post the testing phase in grocery delivery and prepared meals grocery delivery in Australia, they’re next moving to test in North America and Europe. In this aspirational new extension, Uber plans to deliver anything from market supplies to groceries, popcorn to ice-cream and what not. While this may increase their overall operational costs, the extension into grocery delivery will give the company a strong footing against its direct competitors that include Deliveroo and e-commerce giant Amazon. 

The Pilot Phase:

  • The concept is in it’s pilot testing phase in Australia in association with Coles- a local supermarket group; offering bread, milk and fruit from the Sydney store.
  • For North America and Europe, talks are on with supermarkets; while UK May see an association with Sainsbury. 
  • In Belgium and Brazil, the company is collaborating with Unilever and Nestlé where too they are delivering ice-cream, coffee and baby supplies. 

Currently, Uber holds plans to develop their grocery segment in the Toronto engineering office, grossing at $200-million. 

While Uber has a history of trialling its new products in Toronto, Uber Communications Lead- Josh McConneell hasn’t issued any statement if the groceries services will also be first launched in Toronto. However, globally, they do plan on accessing their network of 4 mn drivers to accelerate the services and offer grocery delivery.  

In April, as well, the company tested food delivery for travelers at the Toronto Pearson Airport. According to Jason Droege, head of Uber Eats, transitioning to a convenience and grocery store space is a “logical extension.”

This falls in sync with Uber Eats since both serve the customers’ need for food. And with food delivery business increasingly growing, it will keep Uber Eats afloat, atop others.

According to the report, Droege says they hope to move grocery delivery from it’s piloting phase ‘soon’.

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