Uber Won't Deliver Any More Groceries for Walmart

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Uber Won't Deliver Any More Groceries for Walmart

By Patrycja Malinowska - 05/11/2018

Walmart and rideshare service Uber are ending their partnership for grocery delivery after two years.

Reuters reports that Uber informed Walmart in March that it would shut down its entire "Rush" service, which delivers groceries as well as other goods such as clothes and flowers, effective June 30.

“It is incredibly hard to deliver people and packages together,” a source with a delivery company that works with Walmart and has direct knowledge of the matter told Reuters. “They are two completely different business models.”

The retailer first launched a test with Uber in June 2016 for grocery delivery in the Phoenix metropolitan area that later expanded to other markets. The effort was lauded by executives and promoted with much fanfare.

However, it's not the first partnership with a rideshare service that hasn't proven scaleable. The retailer also ran a pilot with Uber rival Lyft in the Denver region that never expanded beyond the initial test market, Walmart spokeswoman Molly Blakeman told Reuters.

While this is a potential setback for the retailer's grocery delivery ambitions, Blakeman told Reuters it will not impact Walmart’s plans to scale grocery delivery to more than 40% of households by the year's end as they are not tied to any single provider.

The ability to quickly and efficiently deliver groceries to homes is a key part of Walmart's strategy to compete with Amazon, so the retailer isn't putting all its eggs in one basket. Walmart also is working with a number of delivery-focused companies, such as Postmates and DoorDash; purchased same-day-delivery startup Parcel, which specializes in delivery of perishable and nonperishables in New York; began working with smart-lock provider August Home to offer direct-to-fridge delivery for shoppers who install specifically designed smart locks in their homes; and is even testing employee delivery

One big delivery company that Walmart seemingly will not be leveraging is Instacart. According to reports, Walmart would only want to use Instacart delivery people to fulfill orders that flow exclusively through Walmart's own digital properties, while Instacart wants Walmart to list its grocery items for sale on Instacart’s mobile application.

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