Uber Wants to Outdo Amazon for Local Commerce Delivery

·2 min read

(Bloomberg) -- Uber Technologies Inc. is taking its ambitions in delivery beyond food and into retail, seeking to “out-Amazon” Amazon.com Inc., Chief Executive Officer Dara Khosrowshahi said.

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At an industry conference on Tuesday, Khosrowshahi compared Uber’s offerings to Canadian e-commerce company Shopify Inc., which helps merchants set up and operate their digital storefronts. “We think of this as essentially a local Shopify -- we can help you power your local online commerce and the Uber platform and the Uber audience is undeniable in the world,” Khosrowshahi said, speaking at the ShopTalk conference in Las Vegas.

The San Francisco-based company, which was founded as a ride-hailing business, was forced to pivot when the pandemic cratered demand for rides and demand for delivery of everything exploded. Uber has since expanded its offerings from restaurant meals to grocery and convenience items.

Khosrowshahi said the delivery business could eventually grow to be bigger than rides, even when the mobility unit gets back to pre-pandemic levels. Uber added 120,000 non-restaurant merchants on to its platform in the last year. Its delivery business as a whole was profitable in the fourth quarter of 2021, driven by its core food delivery unit, Uber Eats.

Venturing into retail will yield few profits, if any, Khosrowshahi said. “We’re not looking to make money here,” he said. “The growth and the incremental profitability from mobility and our Eats business are more than enough to pay for the investments that we’re making in retail.”

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Despite rising inflation, Khosrowshahi said Uber hasn’t seen a material impact to the business. However, its army of gig workers has seen its earnings whittled down amid high gas prices, prompting Uber to tack on a fuel surcharge to rides and deliveries. In an interview with Bloomberg Technology’s Emily Chang, Khosrowshahi said the company will take additional measures if gas prices remain high in May when the fuel surcharge expires, but stopped short of committing to lowering Uber’s commission from rides and Eats orders.

“We’re going to look at the situation,” Khosrowshahi said, and if it doesn’t change, the company will consider extending the surcharge. “We want to be there side-by-side with our earners and help them make a great flexible living.”

The intensifying scrutiny around driver earnings comes as Uber and rival Lyft Inc. and other gig companies face a potential ballot measure in Massachusetts in November, similar to California’s Proposition 22, which allowed drivers to be classified as independent contractors but was later struck down. The Uber CEO said he spoke with Department of Labor Secretary Marty Walsh last year, and that Walsh “really wants to learn about the benefits of gig work and some of the issues with gig work.”

(Updates with additional CEO remarks starting in fourth paragraph.)

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