Uber announced that it was teaming up with delivery startup Gopuff to expand its delivery business. Gopuff, which acquired liquor store chain BevMo last year, will make its inventory of convenience and grocery store items available to Uber as part of this new deal. The companies plan to roll out their new offerings to customers in 95 cities starting this June and nationwide later in the year.
Gopuff specializes in delivering “essential” or “instant need” items, which is defines as “liquor, local favorites, beauty and pet products, snacks and [over-the-counter] medication.” The company will handle the logistics and delivery of the items, with Uber taking a cut of the transaction through its app, essentially white-labeling Gopuff’s service. Gopuff, which was founded in 2013, operates in 650 cities in the US, with over 250 “micro-fulfillment centers.”
Uber is slowly transforming into a delivery company
The news follows months of Uber slowly transforming into a delivery company after suffering steep financial losses as a result of the pandemic. The company’s ride-hailing business tanked in the early days of 2020, and while it is still slowly recovering, it’s an open question as to whether it will return to its pre-pandemic heights. Uber said it completed nearly 30 percent fewer trips in 2020 as compared to the previous year.
Delivery was a bright spot for Uber, but while its Uber Eats takeout business is well-established, its grocery delivery has still yet to be fully realized. Only 100 cities, including 20 major metros, are eligible to have their groceries delivered by Uber. The company has made a number of acquisitions in recent months, including Postmates, Cornershop, and Drizly, as it seeks to expand its delivery options.
Still, Uber will have its work cut out for it as it seeks to compete with major players in the grocery delivery space, including Amazon and Instacart. Gopuff is an interesting choice for a partner. The company nearly tripled its revenue last year to $340 million as the pandemic forced more people to turn to delivery startups for essential items. But like Uber, the company has struggled to attract and retain drivers, according to The Information.
Update May 4th, 4:13PM ET: Updated to include the types of items that Gopuff delivers.