Watch out Postmates, Instacart, and Shipt. Uber is stepping in the Grocery Delivery market thanks to the October 2019 acquisition of a Latin American start-up by the name of Cornershop.
Recently Uber has been expanding its offerings to diversify its revenue stream. They started by offering Uber Eats (Food Delivery). Then Uber went to Scooters and grocery delivery just seemed inevitable, especially with a slogan like ” Connecting you with the people, places, and things you love. “
Challenges Uber Will Have With Grocery Delivery
Divided Market
Unlike Uber’s core business of people moving grocery delivery and food delivery is a pretty split market. If you read our articles of the most popular delivery companies for Food & Groceries you’ll see markets are clearly divided showing certain strong areas to certain businesses. Where I live (Toledo, Ohio) Shipt is dominant in the grocery delivery & UberEats has food delivery. Even with that, it is not a clear lock on the metro business or no one has market dominance. The People Delivery business where I live is only a little split. Most people in Toledo use Uber, some use Lyft. It is likely a 65% to 35% split
Established Competitors
Humans are creatures of habit. It is hard to change people’s routines. This is why companies have sales, marketing and people in sales. The whole object is to get you to switch what you normally do. Right now a lot of people probably only order from one grocery delivery company; or; only work for one company. Uber starting in the grocery business means they will likely be taking someone’s share in the market.
Advantages Uber Will Have With Grocery Delivery
Established Work Force
One of the hardest challenges for Gig economy companies is having a reliable workforce. Only so many people will likely work in a gig economy position fulltime or even part-time. Building up that workforce can be expensive and take time. Uber likely will not have to spend as much time. They’ll just have to tell their current workers “hey you can make more money doing this too”.
Strong Customer Base
Very similar to Uber having a strong workforce having a strong customer base is also a strong advantage. They could easily just expand UberEats into UberDelivery. This allows them to transform those millions of UberEats customers into UberDelivery customers. Or they could just do in-app notifications to download their new app. Either way, they have a strong customer base they can use to push sales.
Cornershop’s Software
If you’re having trouble making the best just buy the best. A strong strategy for growth in the business world is just to buy the company you’d like to be. This seems to be exactly what Uber decided to do.
Cornershop obviously had some good software, that’s likely why Uber bought them. By purchasing the company they are buying a fully fleshed out company. This way Uber doesn’t have to guess what works and what doesn’t. They just bought the completed product.
It seems, either way, to look at it Uber’s new grocery delivery is going to be a big upset in the market. Be on a watch out for this company to bring some competition into the grocery delivery market.
