What Uber should do now
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Uber is a logistics company. It’s best known for providing rides and delivering food, but the greater Uber ambition has always been to “get you anything in five minutes,” as co-founder and former CEO Travis Kalanick said in 2014.
In a pre-pandemic world, a service that delivered anyone anything in five minutes (or, more realistically, half an hour) was a luxury. Now, with an unprecedented share of the global population on lockdown, it’s suddenly become a necessity.
The billions of people confined to their homes still need food, medicines, and household supplies, at a minimum. But once-routine trips to the store have become risky, especially for the elderly and people with underlying health conditions at higher risk of falling seriously ill from covid-19. So long as social distancing measures remain in place, fewer people going to stores is also better for everyone.
This is where Uber can help. Uber had nearly 1 million active drivers in the US and 5 million worldwide as of February. Yes, many of these drivers were part-time, but in raw numerical terms that’s more than five times the combined global staffs of Fedex and UPS.
Many Uber drivers are rightfully wary of picking up passengers who may be infected with the coronavirus, putting themselves and their families at risk. This fear is particularly acute in the gig economy, where workers tend to lack benefits like healthcare and unemployment insurance that come with a traditional job. On March 24, a New York City Uber driver who ferried a sick passenger from the airport died of covid-19.
But rides aren’t all that Uber has to offer. The company can put its drivers to work more safely, provide an essential service to quarantined communities, and keep its business going by stopping all but vital rides, and focusing on delivery for the duration of the coronavirus crisis.
Uber is uniquely experienced at delivery among ride-hail companies. Uber launched its first delivery service, Uber Rush, in a handful of US cities in October 2015. Rush grew into Uber Eats, the restaurant delivery service Uber still operates today. Lyft, by contrast, never developed a standalone delivery service, and other ride-hail firms came to delivery much later in the game.
Uber delivers things from pickup to drop off. It isn’t designed for the sort of batched, routed deliveries that companies like Fedex, UPS, or even regular mail services do. Uber’s millions of drivers use their own cars and motorbikes, not large company vans or the specialized refrigerated trucks employed by some online grocery services.
That’s not necessarily a bad thing. You don’t need refrigerated vans, for instance, if the groceries you’re picking up will only sit in the car for 30 minutes or less, similar to the length of time many Americans would spend driving home from a supermarket. Uber drivers could easily be assigned to transport groceries, takeout food, pet supplies, and goods from pharmacies, among other household staples.
To make this happen, Uber needs help from shops and businesses. Ideally, sellers would assemble and bag orders so that the Uber delivery person would only have to pick them up at the store and drop them off at the customer’s home. Uber right now should be contacting and signing up as many groceries, corner shops, pharmacies, pet stores, and other suppliers of essential goods as its network can handle.
The company has already started down that road. Uber Eats is accelerating its push into grocery delivery, the Financial Times reported last week, striking a deal with French supermarket Carrefour, among other retailers. In India, where 1.3 billion people are on lockdown, Uber in the past week partnered with e-commerce company Flipkart, online grocer BigBasket, and chain Spencer’s Retail to deliver essential goods in Bangalore, Delhi, and Mumbai. UK convenience store chain Costcutter struck a deal with Uber last fall to deliver staples like milk and bread.
“A lot of small stores, kind of these corner shops, have been integrating with Eats,” Uber CEO Dara Khosrowshahi said on a March 19 call with investors, in which he also revealed that bookings, which are primarily made up of rides, were down 60% to 70% over the previous year in hard-hit cities like Seattle. “We want to be there to help them,” Khosrowshahi continued on corner shops. “There’s demand there. So we’re absolutely aggressively looking at alternative distribution, whether it’s grocery or food. And we definitely expect it to be a bigger part of our business.”
Uber’s existing Eats operation and experience with Rush give it a significant head start, but any ride-hail company could start working now on a pivot to delivery. Lyft, for example, announced a “driver task force” that lets drivers sign up for paid jobs that include providing rides to food bank volunteers and grocery staff.
In China, ride-hail leader Didi Chuxing launched a delivery service in 21 Chinese cities in mid-March after the coronavirus shattered demand for rides. Didi said customers would be able to buy groceries and coffee through the service.
US food delivery startup DoorDash recently added more than 1,800 US convenience stores to its platform. DoorDash competitor Postmates is delivering household goods and over-the-counter medications from more than 7,000 Walgreens. London-based Deliveroo is testing delivery of basic groceries in several countries in Europe, Australia, and the United Arab Emirates.
Uber is also awaiting regulatory approval of its October 2019 acquisition of Cornershop, an online grocery startup based in Santiago, Chile, that delivers from supermarkets and big-box stores like Walmart and Petco in Chile, Colombia, Peru, Mexico, and Canada. Uber and Cornershop must operate separately until the deal is approved.
Whether Uber can deliver will matter not just to Uber’s customers, but also to its workers. The US lost 701,000 jobs in March. Over the past four weeks, 10.4 million Americans filed for unemployment benefits. People are in dire need of work.
Here, again, Uber can help. Uber was born during the 2008 recession, when being able to download an app and start earning money immediately was a lifeline for many Americans who had lost their jobs and savings. That scenario is likely to repeat itself at even greater scale in the coronavirus pandemic. If you’ve been laid off and can’t get a job stocking shelves at a grocery, signing up for Uber or a platform like it might be your best chance at earning a living, or at least staying afloat.
No job that involves venturing into the world will be zero risk, but by prioritizing delivery Uber can greatly reduce the risks its drivers face. Experts believe the risk of contracting covid-19 from packages is generally low and manageable. Uber could make deliveries contactless on both ends—picked up by drivers from a designated area of a store, away from other people, and dropped outside a customer’s home—to minimize those drivers’ interactions with other people.
Uber has already taken steps to make it easier for drivers to start delivering. In cities where Eats is available, Uber drivers who signed up to provide rides can activate delivery requests by toggling a setting in their driver app. Uber said April 6 that it would also connect out-of-work drivers to companies that are currently hiring, including Domino’s, Target-owned online grocer Shipt, and UK online grocer Ocado.
Even the nimblest of ride-hail companies won’t be able to make to the switch to delivery overnight, despite demand from global consumers. But companies like Uber that specialize in logistics and are used to adapting rapidly to changing demand might have the best shot. For Uber to reorient around delivery in our current crisis isn’t just the right thing to do; it could also be a win for workers and for the business.
This time last year (extended edition).
Hello and welcome to Overshearing, a newsletter segment about people attempting to cut their hair at home during coronavirus. Thank you to new reader Emma for the punniest name. Our first contribution comes from Barrett Daniels, who bravely handed off the clippers to his delighted children (and dog). Reply to this email or reach out directly at email@example.com with your own overshearing tales.
Amazon halts delivery service that competes with UPS and Fedex, tests disinfectant fog at New York warehouse after worker protest. Uber expands corporate Eats delivery feature. Independent contractors eligible for emergency unemployment. Airbnb paying more than 10% interest for $1 billion in funding. Airbnb guests struggle to get full cash refunds for cancelled trips. Via raises $200 million from wealthy Italian family behind Fiat and Ferrari. E-scooters vanish from Atlanta, are still available in Tampa. New York legalizes e-bikes and scooters. Coronavirus crushes public transit. Bird cuts 30% of workforce on coronavirus uncertainty. Lime seeks emergency funding at fraction of previous valuation. European Tech Employees Shielded from Layoff Pain. UK gets volunteer army to fight coronavirus. UK grocery delivery services overwhelmed. Social distancing isn’t the right language for what covid-19 asks of us. Socially distant dancing. Regrow your scallions. Buy orange juice. Just Give in to Alison Roman. Everyone wants a milkman.
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