Uber Eats accelerates push into grocery deliveries

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Uber’s Eats unit is accelerating its push into grocery delivery, striking new alliances with retailers including French supermarket Carrefour, as it looks to offset the decline in its ride-hailing business because of the coronavirus lockdown.

The San Francisco-based company is this week launching rapid deliveries of food, toiletries and cleaning products in a wide range of locations around the world, from Brazil to France.

Traditional supermarket delivery services have become overwhelmed in recent weeks by panic buying, forcing customers to schedule orders several weeks in advance. Uber is not competing with those services directly but instead aims to deliver a smaller range of essential items within as little as 30 minutes.

Last month, Uber chief executive Dara Khosrowshahi sought to reassure investors about the impact of the crisis, pointing to its Eats business as a potential counterbalance to a huge drop-off in demand for its transportation services, as many countries order people to stay at home to prevent the spread of Covid-19.

“We are definitely looking at alternative use cases” for the company’s pool of millions of drivers, Mr Khosrowshahi said, pointing to groceries as one example.

Uber’s move into supermarket deliveries, which brings it into closer competition with the likes of Amazon, is not an entirely new strategy. It tested the concept in select markets such as Australia last year.

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But the pandemic has accelerated those plans. A new team focused on grocery deliveries was established a few weeks ago by Pierre-Dimitri Gore-Coty, the new head of Uber Eats, in response to the coronavirus outbreak.

The unit of around a dozen people is looking to strike deals with many different supermarket and convenience store groups around the world, as well as modifying the Eats app to accommodate grocery orders.

Uber launched the first of those partnerships on Wednesday.

Carrefour, which already offers grocery deliveries through Spanish start-up Glovo, will offer fresh food including fruit and vegetables, bread, cheese and meats through the Uber Eats app from 15 stores around Paris.

In Spain, Uber is partnering with Galp, a Portuguese energy group, to deliver items from the convenience stores across its network of petrol stations.

Meanwhile customers in Brazil will be able to order from a range of pharmacies and pet stores, starting in São Paulo.

Pricing of the items available on Uber Eats will be set by retailers. Customers will be able to place orders using the platform’s app, website or by phone call.

The coronavirus outbreak has hit the restaurant industry hard, despite hopes that some could offer takeaway food as diners are forced to stay at home.

Many of the most popular restaurant chains that operate on delivery apps such as Uber Eats, including McDonald’s in the UK, have been forced to close altogether due to the difficulty of keeping kitchen workers a safe distance apart.

Other apps that focus on restaurant deliveries are also looking to diversify. Deliveroo offers items from Marks and Spencer’s concessions on BP garage forecourts, as well as Co-op supermarkets in the UK, and the London-based company is now rolling out a new “essentials” delivery service across several cities.

Uber believes it has an advantage over rivals that specialise in food delivery — or ride-hailing-focused companies such as Lyft — because it can transfer drivers from one line of business to another.

However, private vehicle hire regulations in some countries prevent drivers from delivering food or other packages.

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