7 ms·

Uber starts same-day grocery delivery service in US

64 points by HarveyKandola 12y ago

calvinbhai 12y ago
Dear BBC: Two zones in Washington DC != USA
Noelkd 12y ago
"But long-term this is most likely not going to be economically feasible unless Uber starts to figure out other ways to monetise this, through adding delivery fees or charging advertising fees to brands that take part in the programme." Really sums up the article.
- imjk 12y ago
  They could use the same model as Instacart currently does and charge a premium on the individual products themselves. This is also the same model that online delivery food services (ie Foodler) have successfully employed.
pimlottc 12y ago
As a resident of San Francisco, I find it somewhat amusing to be informed about local services via a British news organization.
sushid 12y ago
I'm just curious as to why DC? They're not based there nor is DC considered to be one of the most densely populated cities.
- bhaumik 12y ago
  Probably influenced by David Plouffe joining the team. He was Obama's senior advisor.
- josephmosby 12y ago
  DC is Uber's second largest market outside of San Francisco - and that includes Chicago, NYC, LA, etc. It's a test kitchen for a lot of consumer services because it's got a lot of different demographics under one roof. It's also relatively small, making it easy for Uber drivers to get around the area without incurring a bunch of extra costs for the company. Grocery delivery is also super popular in DC already. San Francisco, by contrast, is almost too perfect. It would no doubt be successful there, but it doesn't give them as good of a feel for how this service would fare outside of Silicon Valley where these types of ad-hoc delivery services are far more common.
  - mikeash 12y ago
    Is it really relatively small? DC proper is small, but it's just one jurisdiction out of many in the metro area, and not even the largest one. Uber covers a big chunk of the area. Looking at Google Maps (with the scales matched!) you could fit SF proper in about one quadrant of the the DC beltway, and of course there's plenty of city outside the beltway too.
    - josephmosby 12y ago
      True, but DC isn't a traditional metro area. The entire regulatory structure changes once you leave the borders of DC, because you've moved into a new state (Virginia or Maryland). Uber's coverage area for this service takes a hard stop at the DC borders to keep them from running into a new set of state laws and taxes they'd have to deal with.
      - wallawe 12y ago
        Not quite. I live in Arlington, VA and they're currently facing hurtles but they still service the area. For a while there, cops were pulling suspected Uber drivers over and fining them between 500 and 2k (I even had drivers ask me to sit in the front seat so it didn't look like he was chauffeuring). Uber would pay all of the fines for the drivers. It's been an ongoing battle but from what drivers have told me recently, they've calmed down with the arrests.
- joshfraser 12y ago
  Cities like San Francisco are much more saturated with on-demand delivery services. We're a lot harder to impress. I get the sense that they're trying to gather data without drawing a lot of attention to their experiment.
27182818284 12y ago
Instarcart started its delivery via Uber, right? That's a fun little circle.
- orblivion 12y ago
  Google was once Yahoo's search engine.
  - 27182818284 12y ago
    Is that correct? I was under the impression they only pitched to Yahoo and were turned down? Huh.
    - orblivion 12y ago
      I recall seeing it myself, anyway. "Powered by Google". May not have lasted long.
ereckers 12y ago
Why are Silicon Valley startups continually trying to get into the food and grocery delivery business? Is there research somewhere that shows that this is a lucrative market? I'm old enough to remember Webvan, I'm seeing COSTCO cede their delivery service to Google, and I realize that most food delivery business is minimum wage work. I don't see the money in it.
- mmanfrin 12y ago
  I think for two reasons: Food delivery is essentially rent-taking, since once someone begins to use it, they'll use it indefinitely (until a better service or format comes along); and secondly, I see grocery delivery as a way to trojan horse in to same-day parcel delivery, since if a person is delivering your groceries, the marginal cost of having them also deliver a package is tiny in comparison to the cost of delivering just the package.
- 27182818284 12y ago
  >I'm old enough to remember Webvan, I see it as very different from something like, say, Instacart not because of the core idea of grocery delivery, but because Webvan made some mistakes that seem made-up when read today. Recall they had their IPO just 60 days after their first webstore which in turn was something like one month after their beta launch. So they went from beta with 1000 users to IPO in like 90 days. That's, what, the time Instacart spent just in Y Combinator growing and learning?
  - encoderer 12y ago
    Also wasn't WebVan running warehouses? That is so totally different than InstaCart and Google Shopping Express. Your long memory is, IMO, working against you here. AmazonFresh is doing something along the lines of what WebVan was trying, with the capitalization to make a real go of it.
    - 27182818284 12y ago
      >Your long memory is, IMO, working against you here. What you wrote and what I wrote I don't think conflict at all, so I don't know why you'd say it is working against me. Also I have found references to what I wrote in writing[0] so I'm not completely crazy. Now, an anecdote that I might screw up because my memory is fuzzy about it, is that the founder of Instacart was given a copy of Webvan's business plan on a floppy as a sort of "Good luck!" token. [0]: http://www.amazon.com/The-Startup-Owners-Manual-Step-By-Step/dp/0984999302 http://www.amazon.com/The-Startup-Owners-Manual-Step-By-Step...
josephschmoe 12y ago
It's hard to compete with grocery stores: 1. They're local. Most people have a grocery store within 5 minutes of their house. 2. They're well-stocked. You have ten thousand products to choose from. Who could ask for more? 3. They're timely. If you go to a grocery store, it will take you a certain maximum amount of time - the amount of time it takes to go down each aisle once. 4. They're accurate. You picked every item. Your fruit fits your exact criteria. With grocery delivery, you can be perfectly local, but your stock is identical and your accuracy is almost always worse. And your time window + the time it takes to pick the two dozen items you need will almost always be worse than going to the grocery store. That said, there is a niche for this - the elderly and the very, very busy. To capture the second niche, you'll need to up your timeliness though and improve your branding on speed. It should take no longer to deliver groceries than it does to deliver a pizza. I want my DiGiorno delivered.
- kalleboo 12y ago
  Grocery delivery is getting quite popular in parts of Europe now, usually run by the grocery stores themselves (Tesco etc). They're popular with families, where making an outing to buy a week of groceries with two kids in tow after you get off work late in the afternoon can be a real ordeal. Made worse by the fact that fewer people own and drive cars here so you're lugging the groceries on a bus or by foot. In the US it might not be as big a market due to a different lifestyle.
- smackfu 12y ago
  5. They have loyal customers. "Brand X has bad produce" is knowledge handed down between the generations. 6. They have pretty low margins on a lot of their inventory.
- iak8god 12y ago
  I'm neither elderly nor very very busy (maybe ~.5 verys), nor wealthy, but I'd gladly pay 30% more for my groceries if I could order them via a typical online shopping interface and have them show up at home at a set time (within a one hour window).
- nilkn 12y ago
s_q_b 12y ago
Oh my God wow. This is highly convenient. I'm in DC, and I saw the puzzling "corner store" option when ordering a car this afternoon. I'll relate how the delivery experience goes once I try it today or tomorrow. I already get my groceries delivered, usually for free from Safeway or Harris Teeter. One of them will run a free delivery special once every two weeks, so I mostly restock on non-perishables, and grab fresh food from the Whole Foods myself. But the on-demand aspect brings a whole new level of convenience. I'm right in their target demo, so if it works smoothly I'll be thrilled.
- s_q_b 12y ago
  Sad to report that this does not fulfill the gaps in the extant on-demand grocery delivery system. It's expensive, slow, unreliable, and doesn't provide the items for which the application would be most useful, e.g. delivery of fresh perishable foods in a reliable fashion. But, that's what beta tests are for. Here's hoping the next iteration gets it right.
trhway 12y ago
looks like new generation tries their teeth at the same delivery problem that the previous generation tried 15 years ago :) Considering that delivery by a full-bodied adult in a car is a pretty expensive thing, it can be solved either by hyper-optimization (incl. prediction), or by utilizing new or untapped delivery resources like school children/dogs/pigeons/drones/automated cars/electronically collared and constantly video recorded low-offense prisoners/etc...
pistle 12y ago
Pretty sure it's moves like these that will render most Uber valuation apologists' defenses of the valuation based on cab usage growth moot. If they could satisfy the valuation on cab fare middle-person, this would not be the experiment. Also, something close to most peoples' logic spot would be that they are not delivering fresh produce. So, only a subset of the stuff that you find in the "middle aisles." I'll paint in a really broad stroke, but the people willing to pay premiums for the luxury of grocery delivery buy more stuff around the outer edge of the store vs the aisles of processed carbs and food science.
MattGrommes 12y ago
I was just telling my wife that getting somebody to go to Costco for me would be a game changer. Somebody else takes my list and deals with all the people blocking the aisle to get their 5 cents of sample cheese or just because they rudely leave their cart in the middle? The stress reduction alone would be worth the money. I'm using Amazon Fresh and the savings from not eating out due to my laziness-based avoidance of the grocery store is going to pay for it easily.
- callmeed 12y ago
  Those are my kids running around getting samples. Sorry.
- imjk 12y ago
  What city do you live in? Instacart offers one hour Costco deliveries in my city (Boston) right now.
  - listic 12y ago
    How can Instacart afford to be so fast and so cheap? ($5.99 delivery in an hour) I mean, there's at least about an hour of human labor involved in each one hour delivery.
- walls 12y ago
  Google Express has integrated Costco, although that doesn't help if you're outside the bay area.
  - ceras 12y ago
    Or in Manhattan.
    - wutbrodo 12y ago
      Or West LA
nchlswu 12y ago
Reminds me of a startup in Toronto: Usehurrier.com This is really Uber's "On Demand ____" promotions (read: experiments) coming to life and I imagine partnerships with retailers (similar to their local partnerships for events and more recently restaurants) will be an easy next step for this service.
emo_tards_on_hn 12y ago
Hmm.. no thanks. Given the state of the driver in the last Uber cab I took, I wouldn't want him touching my food, especially as his fingers spent most of the time either mining his nose, ears and backside. Yuck!
davidmking 12y ago
All your transportation are belong to us

64 points by HarveyKandola 12y ago

Dear BBC: Two zones in Washington DC != USA

"But long-term this is most likely not going to be economically feasible unless Uber starts to figure out other ways to monetise this, through adding delivery fees or charging advertising fees to brands that take part in the programme." Really sums up the article.

imjk 12y ago
They could use the same model as Instacart currently does and charge a premium on the individual products themselves. This is also the same model that online delivery food services (ie Foodler) have successfully employed.

pimlottc 12y ago

As a resident of San Francisco, I find it somewhat amusing to be informed about local services via a British news organization.

sushid 12y ago

I'm just curious as to why DC? They're not based there nor is DC considered to be one of the most densely populated cities.

bhaumik 12y ago
Probably influenced by David Plouffe joining the team. He was Obama's senior advisor.
josephmosby 12y ago
DC is Uber's second largest market outside of San Francisco - and that includes Chicago, NYC, LA, etc. It's a test kitchen for a lot of consumer services because it's got a lot of different demographics under one roof. It's also relatively small, making it easy for Uber drivers to get around the area without incurring a bunch of extra costs for the company. Grocery delivery is also super popular in DC already. San Francisco, by contrast, is almost too perfect. It would no doubt be successful there, but it doesn't give them as good of a feel for how this service would fare outside of Silicon Valley where these types of ad-hoc delivery services are far more common.
- mikeash 12y ago
  Is it really relatively small? DC proper is small, but it's just one jurisdiction out of many in the metro area, and not even the largest one. Uber covers a big chunk of the area. Looking at Google Maps (with the scales matched!) you could fit SF proper in about one quadrant of the the DC beltway, and of course there's plenty of city outside the beltway too.
  - josephmosby 12y ago
    True, but DC isn't a traditional metro area. The entire regulatory structure changes once you leave the borders of DC, because you've moved into a new state (Virginia or Maryland). Uber's coverage area for this service takes a hard stop at the DC borders to keep them from running into a new set of state laws and taxes they'd have to deal with.
    - wallawe 12y ago
      Not quite. I live in Arlington, VA and they're currently facing hurtles but they still service the area. For a while there, cops were pulling suspected Uber drivers over and fining them between 500 and 2k (I even had drivers ask me to sit in the front seat so it didn't look like he was chauffeuring). Uber would pay all of the fines for the drivers. It's been an ongoing battle but from what drivers have told me recently, they've calmed down with the arrests.
joshfraser 12y ago
Cities like San Francisco are much more saturated with on-demand delivery services. We're a lot harder to impress. I get the sense that they're trying to gather data without drawing a lot of attention to their experiment.

27182818284 12y ago

Instarcart started its delivery via Uber, right? That's a fun little circle.

orblivion 12y ago
Google was once Yahoo's search engine.
- 27182818284 12y ago
  Is that correct? I was under the impression they only pitched to Yahoo and were turned down? Huh.
  - orblivion 12y ago
    I recall seeing it myself, anyway. "Powered by Google". May not have lasted long.

ereckers 12y ago

Why are Silicon Valley startups continually trying to get into the food and grocery delivery business? Is there research somewhere that shows that this is a lucrative market? I'm old enough to remember Webvan, I'm seeing COSTCO cede their delivery service to Google, and I realize that most food delivery business is minimum wage work. I don't see the money in it.

mmanfrin 12y ago
I think for two reasons: Food delivery is essentially rent-taking, since once someone begins to use it, they'll use it indefinitely (until a better service or format comes along); and secondly, I see grocery delivery as a way to trojan horse in to same-day parcel delivery, since if a person is delivering your groceries, the marginal cost of having them also deliver a package is tiny in comparison to the cost of delivering just the package.
27182818284 12y ago
>I'm old enough to remember Webvan, I see it as very different from something like, say, Instacart not because of the core idea of grocery delivery, but because Webvan made some mistakes that seem made-up when read today. Recall they had their IPO just 60 days after their first webstore which in turn was something like one month after their beta launch. So they went from beta with 1000 users to IPO in like 90 days. That's, what, the time Instacart spent just in Y Combinator growing and learning?
- encoderer 12y ago
  Also wasn't WebVan running warehouses? That is so totally different than InstaCart and Google Shopping Express. Your long memory is, IMO, working against you here. AmazonFresh is doing something along the lines of what WebVan was trying, with the capitalization to make a real go of it.
  - 27182818284 12y ago
    >Your long memory is, IMO, working against you here. What you wrote and what I wrote I don't think conflict at all, so I don't know why you'd say it is working against me. Also I have found references to what I wrote in writing[0] so I'm not completely crazy. Now, an anecdote that I might screw up because my memory is fuzzy about it, is that the founder of Instacart was given a copy of Webvan's business plan on a floppy as a sort of "Good luck!" token. [0]: http://www.amazon.com/The-Startup-Owners-Manual-Step-By-Step/dp/0984999302 http://www.amazon.com/The-Startup-Owners-Manual-Step-By-Step...

josephschmoe 12y ago

It's hard to compete with grocery stores: 1. They're local. Most people have a grocery store within 5 minutes of their house. 2. They're well-stocked. You have ten thousand products to choose from. Who could ask for more? 3. They're timely. If you go to a grocery store, it will take you a certain maximum amount of time - the amount of time it takes to go down each aisle once. 4. They're accurate. You picked every item. Your fruit fits your exact criteria. With grocery delivery, you can be perfectly local, but your stock is identical and your accuracy is almost always worse. And your time window + the time it takes to pick the two dozen items you need will almost always be worse than going to the grocery store. That said, there is a niche for this - the elderly and the very, very busy. To capture the second niche, you'll need to up your timeliness though and improve your branding on speed. It should take no longer to deliver groceries than it does to deliver a pizza. I want my DiGiorno delivered.

kalleboo 12y ago
Grocery delivery is getting quite popular in parts of Europe now, usually run by the grocery stores themselves (Tesco etc). They're popular with families, where making an outing to buy a week of groceries with two kids in tow after you get off work late in the afternoon can be a real ordeal. Made worse by the fact that fewer people own and drive cars here so you're lugging the groceries on a bus or by foot. In the US it might not be as big a market due to a different lifestyle.
smackfu 12y ago
5. They have loyal customers. "Brand X has bad produce" is knowledge handed down between the generations. 6. They have pretty low margins on a lot of their inventory.
iak8god 12y ago
I'm neither elderly nor very very busy (maybe ~.5 verys), nor wealthy, but I'd gladly pay 30% more for my groceries if I could order them via a typical online shopping interface and have them show up at home at a set time (within a one hour window).
nilkn 12y ago

s_q_b 12y ago

Oh my God wow. This is highly convenient. I'm in DC, and I saw the puzzling "corner store" option when ordering a car this afternoon. I'll relate how the delivery experience goes once I try it today or tomorrow. I already get my groceries delivered, usually for free from Safeway or Harris Teeter. One of them will run a free delivery special once every two weeks, so I mostly restock on non-perishables, and grab fresh food from the Whole Foods myself. But the on-demand aspect brings a whole new level of convenience. I'm right in their target demo, so if it works smoothly I'll be thrilled.

s_q_b 12y ago
Sad to report that this does not fulfill the gaps in the extant on-demand grocery delivery system. It's expensive, slow, unreliable, and doesn't provide the items for which the application would be most useful, e.g. delivery of fresh perishable foods in a reliable fashion. But, that's what beta tests are for. Here's hoping the next iteration gets it right.

trhway 12y ago

looks like new generation tries their teeth at the same delivery problem that the previous generation tried 15 years ago :) Considering that delivery by a full-bodied adult in a car is a pretty expensive thing, it can be solved either by hyper-optimization (incl. prediction), or by utilizing new or untapped delivery resources like school children/dogs/pigeons/drones/automated cars/electronically collared and constantly video recorded low-offense prisoners/etc...

pistle 12y ago

Pretty sure it's moves like these that will render most Uber valuation apologists' defenses of the valuation based on cab usage growth moot. If they could satisfy the valuation on cab fare middle-person, this would not be the experiment. Also, something close to most peoples' logic spot would be that they are not delivering fresh produce. So, only a subset of the stuff that you find in the "middle aisles." I'll paint in a really broad stroke, but the people willing to pay premiums for the luxury of grocery delivery buy more stuff around the outer edge of the store vs the aisles of processed carbs and food science.

MattGrommes 12y ago

I was just telling my wife that getting somebody to go to Costco for me would be a game changer. Somebody else takes my list and deals with all the people blocking the aisle to get their 5 cents of sample cheese or just because they rudely leave their cart in the middle? The stress reduction alone would be worth the money. I'm using Amazon Fresh and the savings from not eating out due to my laziness-based avoidance of the grocery store is going to pay for it easily.

callmeed 12y ago
Those are my kids running around getting samples. Sorry.
imjk 12y ago
What city do you live in? Instacart offers one hour Costco deliveries in my city (Boston) right now.
- listic 12y ago
  How can Instacart afford to be so fast and so cheap? ($5.99 delivery in an hour) I mean, there's at least about an hour of human labor involved in each one hour delivery.
walls 12y ago
Google Express has integrated Costco, although that doesn't help if you're outside the bay area.
- ceras 12y ago
  Or in Manhattan.
  - wutbrodo 12y ago
    Or West LA

nchlswu 12y ago

Reminds me of a startup in Toronto: Usehurrier.com This is really Uber's "On Demand ____" promotions (read: experiments) coming to life and I imagine partnerships with retailers (similar to their local partnerships for events and more recently restaurants) will be an easy next step for this service.

emo_tards_on_hn 12y ago

Hmm.. no thanks. Given the state of the driver in the last Uber cab I took, I wouldn't want him touching my food, especially as his fingers spent most of the time either mining his nose, ears and backside. Yuck!

davidmking 12y ago

All your transportation are belong to us