Uber Is Making Moves to Become a Grocery Delivery Powerhouse

For some time, there has been intense competition between delivery services. The peak of the rivalry occurred during the pandemic and immediately after, as consumers opted to order items to avoid leaving their homes. Nevertheless, companies such as Uber and Instacart have persevered, and despite a decline in the intensity of the conflict, the competition among them and others remains fierce as they strive to attract customers.

Uber’s Expansion

When people think about grocery delivery, Uber is not usually the first company they think about. However, the company is now expanding its grocery delivery service with several updates to the Shop and Pay feature, which was launched last year. The updates are aimed at improving the experience for couriers.

The feature allows couriers to opt-in to receive trips to do grocery or retail shopping for customers before dropping off orders. The feature follows the Instacart model, and it has achieved results, even if they have not matched Instacart:

• Uber saw nearly 200,000 couriers take on shopping trips each month in the US
• Instacart has over 600,000 people working as shoppers

However, Uber sees an opportunity to scale, expanding its grocery delivery pillar. But it is not the only thing the company is scaling. It has plans to cross-sell customers across the platform in multiple ways:

• Food delivery to grocery delivery
• Alcohol to experiences
• Experiences to rides

The company wants to expand in many directions, which is precisely why they are updating things to improve the courier experience. Their shoppers are key, according to Meghan Casserly, Uber’s Head of Communications for Delivery, who said, “Shoppers are a key ingredient to the success of Uber’s grocery ambitions, and we’re making great progress — but have a ways to go.”

Out-of-Stock Solution

One of the updates sees Uber directly addressing out-of-stock items — a consistently reported issue in surveys. In fact, nearly one in five grocery orders includes at least one out-of-stock item, which is an annoying addition to a shopper’s experience that can lead to wasted time looking for a substitution.

The app now provides a list of suggested substitutions based on similar brands or items. This new feature also allows shoppers to send the suggested substitution directly to the customer in the app for review, improving communication between the shopper and the customer.

Instacart has a similar feature where drivers can choose between replacement suggestions prompted in the app, and the customer can approve the replacement on their end. For Uber, improving the experience of shopping for the customer is well within its interest to increase the usage of the offering.

Digital Payments Solution

Previously, drivers received a physical credit card pre-authorized to cover the costs of orders they shopped for. However, that came with problems for the shoppers, such as the card being declined. When something like that happened, shoppers were forced to:

• Cancel the order
• Pay out of their own pocket

Canceling an order wastes their time and costs them money, while paying out of their own pocket means they have to hope for reimbursement. With the update, shoppers can activate a digital card on their phones using Apple or Google Pay, making the payment process quicker and easier.

According to a recent survey conducted by Uber, 92% of shoppers found activating digital payments easy, and 88% found it easy to check out. On the other hand, while Instacart launched a Mobile Checkout option using Apple Pay and Google Pay in 2020, drivers have reported the continued need to use the physical card when orders exceed the price tap limit.

Order Clarity Solution

Drivers have lacked clarity over orders, which has made things difficult for many of them. That is addressed as well, with the feature now giving drivers more clarity over orders before they accept them.

Shoppers now have visibility into the number of unique items in an order, rather than just the total number of items. It provides shoppers with a better idea of the size and weight of the order, such as whether they are picking up one gallon of milk or five, to decide whether it will fit in their vehicle.

In the near future, the “offer card” will also provide shoppers with additional information about the order, such as whether it contains large, heavy, or fragile items. These updates are intended to make the job more manageable for Uber’s couriers.