Uber to upset rapid grocery delivery space as it plots its own service


Uber is planning on rolling out its own ultra rapid food delivery service, with the highly competitive market receiving a large amount of venture capital.

Uber Eats launched its grocery delivery service in July 2020, during the pandemic, however has yet to step into the ultra rapid space.

Venture capital firms (VC) have so far invested $21.1 billion into grocery delivery startups so far this year, after the pandemic fuelled exponential growth in the market.

“We need to be in that space,” Uber Eats head of merchant operations Yadavan Mahendraraj said during a third-party delivery panel discussion at the Food on Demand conference held last week in Las Vegas.

Uber Eats believes it will gain a foothold in the sector through strategic alliances with fast delivery players like Gopuff in the US and Carrefour in Paris, the company’s global head of grocery and new verticals told Business Insider.

Beri said: “We’re mainly focused on partnerships”.

Mahendraraj added: “We’re familiar with being in a market where there’s a lot of money being poured in. And, so for sure, there is an element of where there is quite a bit of spending early on.”

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He also believed that VC investment would probably subside within the next three years, however for now he believes rapid grocery delivery is still “clearly a use case that exists for consumers.”

“Are we looking at that space? Absolutely,” he continued.

“Are we also realizing there’s a lot of movement, so we need to cut through the noise? Yes, absolutely.”

The food delivery giant is testing the waters with US brand Gopuff, which has seen a rapid rise in the last 12 months.

“We believe in this opportunity,” Mahendraraj said of the overall on-demand grocery sector.

“We can see that there’s consumer demand and want to meet consumers where they need to be met.”

Uber’s grocery and new delivery verticals division is currently a $3 billion industry that covers around 400 cities.

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