Will UberEATS And UberRUSH Drive Company Value?

George Anderson,CONTRIBUTOR
Uber isn’t just about picking up people and delivering people. No, according to reports, Uber drivers are, or soon will be, delivering restaurant meals and purchases from merchants, as well.
Uber has launched UberEATS in Chicago and New York after testing the food delivery service in Barcelona and Los Angeles. The service promises to deliver curated dishes from popular restaurants in minutes for a flat fee of $3 or $4. The UberEATS menu changes daily.

Uber is also reported to be getting ready to launch a same-day retail delivery service known as UberRUSH. According to TechCrunch, the company is currently in talks with over 400 different merchants, including Cohen’s Fashion Optical, Hugo Boss, Louis Vuitton, Neiman Marcus and Tiffany’s, about using its drivers and couriers to deliver goods.

An unidentified source told TechCrunch that Uber initially planned to offer the delivery service for large e-commerce retailers such as Amazon and eBay, but discovered that getting goods out of warehouses wasn’t cost effective or time efficient. Picking up items from local shops, however, can work “as long as the vendor has control over the amount and type of inventory available in a single day.”

In an online discussion last week, many members of the BrainTrust of industry insiders at RetailWire saw big potential for Uber’s move into food delivery and beyond.

“The keys are ease of use, convenience, timely deliveries, value and price transparency,” said Dr. Richard George, professor of food marketing at Saint Joseph’s University. “If Uber can deliver on these attributes, the days of customer pick-up may be history.”

Photo: Andrew Caballero-Reynolds/AFP/Getty Images

“Uber is so deep into data with its closed loop feedback systems,” said Karen Herman, founder and design director at Gustie Creative. “Now with UberRUSH using the Spring platform with the Uber merchant delivery program, the ability to have real-time inventory data on locally available goods from selected merchants, in specific markets, will exist. This is same-day delivery like never before. Coupled with a user-friendly app, UberRUSH will definitely fly.”

“I see an opportunity for retailers, especially smaller local chains, to use the Uber platform to differentiate on services offered without taking on any fixed costs while limiting additional liability,” said Mohamed Amer, vice president of global creative industries at SAP. “The opportunity for Uber is clear as articulated in the articles and drivers gain more efficiencies with the variety of trips to reduce ‘deadhead’ miles.”

Some, however, were more cautious about Uber’s expansion, both in terms of logistics and working arrangements.

“It’s hard enough to deliver a brand experience when you control all the steps,” said Bob Phibbs, president and CEO of The Retail Doctor. “I predict that the more third parties are involved with the final leg the more missteps will occur, which in the end will hurt the brand, not the third parties. And how many Uber drivers will like being reduced to pizza delivery boys and girls in their nice family cars?”

“The idea of Uber is great, and all kinds of services deserve to be disrupted, taxis the most, but I still haven’t decided if what Uber is doing is great for all parties, or exploitative of desperate people,” said Nikki Baird, managing partner at RSR Research. “How do the drivers feel about a $3-4 flat rate delivery? Is that reasonable for them, given that Uber covers nothing related to car costs?”

“This model is by no means mature, or even established,” said Ms. Baird. “So I offer a note of caution here — it all sounds great. But let’s make sure everyone can make money off of it, and not just Uber at the expense of a steady stream of naive drivers trying to make a living.”