Expansion in the Face of Aggression: Uber now Offers Grocery Delivery

 

Article by Alison K. Lanier | 826 words

Uber is apparently undaunted by aggression it has faced from taxi companies over the last year. The ride-share service announced they will be expanding into a grocery delivery service, with a Washington, D.C., pilot program.

An Open, Friendly Premise

Uber emerged over the last months as a popular cab alternative and a ride-sharing app similar to Lyft. Users hire a car from the Uber smartphone app and watch it approach the pick-up location on a GPS map. With lower prices than traditional taxis and a professional aesthetic, Uber is extremely popular, especially among students in urban areas.

I’ve talked to Uber drivers who use the job as an insomniac pastime or who switched from jobs as conventional taxi drivers. As soon as you order your Uber car, the driver’s name, number, and car model appears on the screen.  It’s a cab service with personality that comes across as highly personable. Every car has a face, and every driver cheerfully makes conversation. The lower price tag doesn’t hurt either.

Stiff Competition

It’s also easy to see where the anger from taxi-driver unions comes from, as reported by Nvate previously. The BBC gave a neat grocery list of Uber unrest: In Los Angeles and Paris, cab drivers lashed out at Uber cars. Berlin and Seoul recently banned the app over “safety concerns.” In London, protesting cab drivers brought traffic to a halt with their anti-Uber protest. The root of these clashes seems to be that Uber creates, what one senior Member of Parliament calls, a sense of “competing unfairly.” But if the app is so disastrously convenient and easy to use, the real threat seems to be that the new app-based system could very well topple the old ways.

In the face of all this adversity, Uber continues to expand. According to the BBC, the Seoul ban did run counter to Uber’s plans for expansion in Asia. However Uber is now reaching out in another avenue. The Corner Store, a grocery delivery service, is now available as an experimental program from Uber in Washington, D.C.

A Crowded Field

Just like its presence in the ride-sharing industry, the grocery-delivery feature is not operating unopposed. Google’s Shopping Express, AmazonFresh, and Instacart all offer similar grocery delivery services in select areas. Uber’s Corner Store service area, though, does not overlap with the service area for either AmazonFresh, which operates along the West Coast, or ShoppingExpress, which delivers in New York City and Los Angeles, according to the BBC.

Shopper

Credit: Ambro of FreeDigitalPhotos.net

Uber is no stranger to delivery services, although this is its first foray into deliveries as mundane as groceries. In New York City, the company has been operating a courier service, UberRUSH, since last April, according to their blog. The service has been used—according to Uber blog testimonials—by businesspeople to rush documents, hotel owners to transport extra keys, and fashion designers to get their pieces to New York shows.

Keeping up Appearances

Uber’s delivery service, in the company’s presentation, operates with the same sleek aesthetic as the ride-sharing service. Uber’s site has always emphasized a minimalist, business-like look, presumably to set itself apart from Lyft’s pink-mustached, somewhat goofy model. Uber’s grocery delivery, therefore, seems slightly out of character. In what The New York Times called the “sharing economy,” Uber, Airbnb, and Instacart are all decentralized, relatively new modes of operation, to differentiate them from, say, Peapod.

The move into delivery services by companies like Uber, according to the BBC’s analyst, may be an attempt to give drivers something to do in off-hours. Since the drivers work on a freelance basis, it is important that Uber can offer its employees—put simply—tasks when ride-demand is slow.

The Times also indicates that delivery services like Instacart and now Uber’s Corner Store do not intrude on an existing market the same way that ride sharing does. On the contrary, the personal-shopper aspect of grocery services, which two-year-old Instacart uses, in fact creates a new job which pays more than average grocery store work.

Dodging Conflict

Uber may be looking to avoid further confrontation with existing unions. It is even—judging by its choice of test city—looking to avoid stepping on the toes of other sharing-economy delivery services. Meanwhile, the company is also able to pursue expansion. Corner Store is a creative solution to Uber’s growing public-image problem while improving the lot of drivers already employed by the company.

Time will tell how adept Uber proves at this new specialization—and how well it plays with their smooth, professional image. If the service does spread to other urban areas like New York or Los Angeles, Corner Store would then be encroaching on preexisting services like Instracart and Shopping Express. But the nature of the competition would not raise the same accusations of undermining union jobs, like London’s black cabs. Uber seems to be pursuing broader business and lower tensions, although its solution to the anger over ride-sharing services has yet to be resolved.

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