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Uber expands grocery delivery to 400 cities, including NYC and San Francisco

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The expansion was fueled by a partnership with the parent company of Safeway and Acme

In this photo illustration, Uber Eats logo of a US online... Photo Illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images

Uber has more than doubled the number of cities where it delivers groceries, marking the first major expansion of the new service since its launch last year. The company’s on-demand and scheduled grocery delivery is now available in 400 cities, including key markets like New York City, San Francisco, and Washington, DC.

Uber’s grocery delivery service got turbo-charged by a partnership with Albertsons Companies, the publicly traded owner of major grocery brands like Safeway, Vons, Jewel-Osco, Shaw’s, Acme, Tom Thumb, Randalls, United Supermarkets, Pavilions, Star Market, Haggen, Carrs, Kings Food Markets, and Balducci’s Food Lover’s Market.

The ride-hailing company (which is quickly becoming more of a delivery company) expects to be able to offer grocery delivery to customers nationwide by the end of the year. 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.

During the pandemic, Uber’s core ride-hailing business tanked as a result of lockdown orders. In response, the company quickly pivoted to food delivery and later to groceries, as it sought to find new revenue streams. Today, Uber is still relying heavily on cash from its delivery products as it struggles to make up for a nationwide driver shortage. Of course, delivery won’t work without drivers either.

To help fuel its grocery delivery expansion, Uber has acquired a number of smaller startups in recent months, including Postmates, Cornershop, and Drizly, as it seeks to expand its delivery options. In addition to Albertsons, Uber is also partnering with delivery startup Gopuff, which specializes in delivering “essential” or “instant need” items, like liquor, beauty and pet products, snacks, and over-the-counter medication.

Using Uber the old-school way, to get a ride somewhere, is more expensive than it’s ever been. Fares are up by as much as 40 percent, with Uber CEO Dara Khosrowshahi admitting to The New York Times in a recent interview that price is “not where it needs to be right now.”

It remains to be seen how the shortage is effecting prices on its grocery delivery plans. (Uber is promising free delivery on orders of more than $30 for its Uber Pass subscription members.) Khosrowshahi said that the company’s second quarter margins, which are scheduled to be reported August 4th, will be “hurt” by the company’s efforts to lure drivers back with financial incentives.