Ecosystems

Uber Pushes Partnerships In Pursuit Of Profits

Chasing Profit, Uber Keeps Building Ecosystem

The Uber ecosystem keeps on growing, and though obstacles always arise – some economic, some regulatory, some driven by other factors – paying attention to each new stage of growth can give hints about what’s to come, and what Uber’s rivals might have to start worrying about.

It is in that spirit that we here at PYMNTS report the latest Uber move.

According to a statement, Organic Garage said it has crafted “a partnership with Cornershop to utilize the digital app or website for the online ordering and delivery of groceries from all Organic Garage retail locations.”

“After extensively researching what other grocery retailers are doing for online sales and the possibility of developing an in-house application, we feel that the best and most economical route is to utilize a third-party platform like Cornershop,” said Organic Garage CEO Matt Lurie. “We are excited to offer this service not only to our existing customers, but especially to new customers who don’t currently have an Organic Garage location close by.”

Uber bought Cornershop last October. The on-demand grocery app launched in Chile and Mexico in 2015, and has most recently expanded to Canada and Peru. This new partnership with Organic Garage – which describes itself as “one of Canada’s leading independent organic grocers” – said its deal with Cornershop went live on Thursday (Jan. 29). The deal makes Organic Garage the “second official grocery partner” for Cornershop after Walmart.

That deal reflects the increasing importance of providing more food to consumers at home – itself part of the broader trend, well-documented by PYMNTS, of consumers doing more commerce and payment activities from the web-enabled comfort of their own homes. The deal also reflects the ongoing growth of the Uber ecosystem.

Wow Factor

Just take one example: a recent development that would seem to have more than a bit of the famous “wow factor.”

In early January, news emerged that Uber and South Korea’s Hyundai Motor, one of the most popular automotive brands in the world, were going to work together to create air taxis. The four-passenger, all-electric passenger air taxis will be piloted at first, but will reportedly become autonomous over time. A prototype was unveiled at Las Vegas’ Consumer Electronics Show (CES) in early 2020, the Financial Times reported.

According to current plans, the flying taxi is meant to vertically take off and land, with a 180 mph top speed and a 60-mile range. “We believe Hyundai has the potential to build Uber Air vehicles at rates unseen in the current aerospace industry, producing high-quality, reliable aircraft at high volumes to drive down passenger costs per trip,” said Eric Allison, head of Uber Elevate, according to FT.

The gig economy, as one can imagine, also is providing an opportunity for Uber to expand its ecosystem. The example, in this case, is something called Uber Works. In Miami, according to news from late in 2019, the ride-hailing pioneer aims to extend its relatively new service that leverages the marketplace model to connect buyers and sellers, according to reports. As the name implies, the focus is on work, where the buyers are employers and the sellers are temporary workers. The launch into Miami represents the second city where Uber Works takes root, on the heels of Chicago two months ago.

“There’s a lot of demand for skilled workers, especially in entry-level and hospitality sectors,” said Andrey Liscovich, CEO of Uber Works, to the Miami Herald. “For us, this sector is not really new – we’ve been operating in a tight labor market, and it builds on strengths Uber already has.”

Recruits for Uber Works may come from the extant pool of drivers. We note that the ability to “cross-sell” offerings to a pool of customers has been an essential strategy for Uber. It’s been evidenced on the customer side of the business, where Uber has illuminated its ability to attract and retain customers (at more than 15 million, according to filings) who sample both the ride and the restaurant sides of the business.

New Paths to Growth – and Profit?

Further forces could help Uber expand its ecosystem in other ways, encouraged by other big players in the global tech scene. On Thursday (Jan. 30), the Financial Times published a report that said food delivery companies Uber and DoorDash had met to talk about a potential merger about six months ago, at the request of SoftBank, which is a shareholder in both companies. If the merger had been completed, it would have sped up what many analysts say is necessary for the food delivery industry – large companies consolidating to become profitable.

That’s the thing – Uber keeps expanding its ecosystem without really making a profit. The question, no doubt, will increasingly come down to how long that situation might last.

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Exclusive PYMNTS Study: 

The Future Of Unattended Retail Report: Vending As The New Contextual Commerce, a PYMNTS and USA Technologies collaboration, details the findings from a survey of 2,325 U.S. consumers about their experiences with shopping via unattended retail channels and their interest in using them going forward.

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