Market Mad House

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Grocery Wars

Walmart to End Uber and Lyft Delivery, Uber Rush Shutting Down

The world’s largest retailer Walmart (NYSE: WMT) plans to stop using Uber and Lyft’s delivery services.

Uber and Lyft deliveries of Walmart same-day purchases are scheduled to end on June 30, 2018, Reuters reported. The delivery will end because of poor communication between the ride-railing giants and the retail behemoth, unidentified sources at Walmart told Reuters.

Walmart spokeswoman Molly Blakeman confirmed the end of Lyft and Uber delivery experiments in Denver and Phoenix, Reuters reported. Blakeman failed to confirm the claims about poor communication.

Other delivery services will take the place of Uber and Lyft, and customer service should not be affected, Blakeman said. Walmart owns the same-day delivery service Parcel and is working with some other delivery services including Deliv and Google Express. Walmart is also working with Postmates and DoorDash, Reuters reported.

The end of the Uber and Lyft delivery experiments will not affect Walmart’s much-publicized plans to offer grocery delivery to 40% of Americans, Reuters reported.

Uber Rush to Shut Down

One reason why Walmart is ending the Uber is that the Uber Rush delivery service is scheduled to shut down in June. Uber will cease its delivery operations on June 30, 2018, company spokeswoman Ellen Cohn told Reuters.

Walmart was reportedly Uber Rush’s biggest customer. Reuters did not say how deliveries from Sam’s Club, which Walmart owns, will be affected. Sam’s Club has been experimenting with Deliv same-day deliveries in Miami.

Uber Rush apparently did not fit into the business plans of new Uber CEO Dara Khosrowshahi who wants to concentrate on passenger service. A problem Uber may have faced was finding drivers willing to do delivery. Other troubles Uber might have wanted to avoid included union conflicts and compliance with health regulations.

Uber Kroger Delivery Ends too

This means that Uber grocery delivery from Kroger subsidiary Harris Teeter, which is available in a few markets will shut down on June 30. Kroger customers should not notice a disruption because Instacart will take up the slack.

Walmart faces intense competition in delivery from Kroger (NYSE: KR) and Amazon (NASDAQ: AMZN). Kroger plans to roll out grocery delivery nationwide through Instacart. Amazon is testing Prime Now grocery delivery from Whole Foods in Southern California.

The future of delivery will be specialist delivery firms such as Grubhub (NYSE: GRUB) and Instacart that concentrate on one kind of order such as groceries or hot meals. One-size fits all delivery such as that promoted by Uber Rush appears to be a flop.

Expect more retailers to follow the lead of Target (NYSE: TGT) which bought the delivery service Shipt and bring delivery in-house. Another likely development is that Uber will shut down Uber Eats; or sell it to a competitor such as Grubhub or Instacart.