Uber is doubling down on grocery delivery

Uber is upgrading its grocery delivery service.

While the company rose with ridesharing, its delivery business picked up in the pandemic as people were more likely to be home and advised against getting into cars with others. The company’s Uber Eats service initially launched grocery delivery two years ago as an addition to its then-restaurant-focused delivery offering. In 2021, it acquired Chile-based grocery delivery service Cornershop, and added 24,000 grocery stores around the world. Growth has only continued, including the notable US addition of 2,000 Albertsons stores over the last two years.

With a raft of new features announced on Thursday, Uber said it is rolling out a fuller version of the integration with Cornershop’s technology and team to users and merchants this summer. Taken together, the updates are the largest improvement to Uber's service yet, all designed to make grocery delivery “more convenient, intuitive, and reliable.”

For users, Uber is making a number of updates based on consumer feedback. They include:

• After hours ordering: Users can place grocery orders at stores even when they aren’t open, with delivery set for the “first available window” or scheduled at a customer’s convenience.
• Order tracking: Uber is looking to upgrade support, including offering live order tracking that shows when each item is scanned to a cart, as well as when it is on the way.
• Intuitive shopping: Users will be able to select product replacements if an item is out of stock, and shop for items like produce or meat by weight.

For merchants, updates coming to the app this summer include:

• Barcode scanning
• Inventory management upgrades
• The ability to more easily add an item to images
• Real-time support to fix issues

Uber’s continued expansion of grocery delivery shows it sees continued growth for the service, even as more in-store shopping and ridesharing is returning.

Speaking in April at the ShopTalk conference, Uber CEO Dara Khosrowshahi said that expansion in grocery delivery was part of the company’s push to be a leader in “local commerce,” which involves the delivery of items from nearby merchants to customers. Khosrowshahi added that Uber believes that “rapid delivery should be a part of every local grocery player's offerings," and that Uber could introduce for them in a "capital-light" way. While Uber Eats started with meals from restaurants, it is expanding with delivery of items from grocery and convenience stores, including non-food items – the so-called Don’t Eats model promoted by its celebrity-strewn Super Bowl commercial.

Each of these areas has its own set of players vying to quickly shuttle orders to doorsteps alongside Uber. Grocery delivery has Walmart, which makes it a part of its subscription service, and Instacart, which announced intentions to go public, has been slashing its valuation and making its own product updates. DoorDash and Grubhub are also expanding from meals into non-food items. Quick commerce companies like Gopuff are delivering convenience items in tight timeframes. Plus, Amazon looms over each segment, not only in grocery delivery via Whole Foods but also the ability to deliver items quickly via its fulfillment network.

Still, there's plenty of potential upside in grocery. It is an area that is expected to grow, with executives in the grocery sector recently telling McKinsey that they expected ecommerce penetration to more than double in the next 3-5 years. Uber is positioning itself as part of this rise, and it has quickly built up a notable presence in the area, given the range of stores it is partnering with in the US and international markets. Offering delivery from multiple locations creates a kind of marketplace, and additional opportunities can also grow out of this model to further strengthen the business. Retail media could offer brands and retailers the opportunity to advertise inside Uber’s delivery experience. And Khosrowshahi hinted that the company will seek to provide logistics technology to local businesses.

The product provides a foundation for all of that, and this summer’s upgrades to Uber Eats signal that the company wants to continue to make the service better.