Uber to expand grocery delivery in deal with GoPuff
New York — Uber Technologies will vastly expand grocery delivery in the US this northern hemisphere summer through a partnership with GoPuff, a fast-growing delivery start-up and owner of the liquor store chain BevMo!, the companies were due to announce on Tuesday.
GoPuff will make its inventory of convenience store and grocery items available to Uber customers in 95 US cities from June and nationwide by the end of the summer, the companies said. GoPuff will handle logistics and delivery for the orders, and Uber will take a percentage of each transaction made through its app.
The coronavirus pandemic transformed Uber into a delivery company when demand abruptly shifted away from ride-hailing. Gross bookings from delivery more than doubled in 2020 to $30.2bn. Uber embraced the change by bolstering its food delivery business with the $2.65bn acquisition of Postmates and by adding groceries and other goods, including alcohol with the purchase of another start-up, Drizly.
Uber is set to report first-quarter financial results on Wednesday that will show signs of recovery for the rides business. Still, delivery remains a central part of the company’s future.
The volume of searches in Uber’s app for grocery and convenience store items grew 40% since the start of the year, said Raj Beri, the company’s head of grocery and new verticals delivery. The deal with GoPuff positions Uber to be more competitive with the likes of Amazon.com and Instacart on those products.
For GoPuff, it’s an opportunity to keep growing at a pace similar to Uber in its start-up days. The two share a major common investor in SoftBank Group and a years-long tradition of operating unprofitably. Investors valued GoPuff at $8.9bn in March, more than double what it was five months earlier.
The most-ordered items on GoPuff last week were toilet paper, White Claw hard seltzer and Tylenol, the start-up said. The first locations where Uber will offer GoPuff items include Chicago, Houston and Miami.
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