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Uber takes on Google in the instant-delivery realm

The company has launched a test in its headquarters market of Washington of a service called Corner Store that allows users to order from a menu of products that includes toiletries, gifts and office supplies. It would seek to revive to some degree one of the failed business models of the dot-com bubble at the start of the century, exemplified by

“We’re excited to share one more experiment from the Uber Garage and offer D.C. users a seamless and convenient way to get their everyday items at the touch of a button,” said Taylor Bennett, a spokesman for Uber Technologies. “We’ve already seen an incredible response to Uber Corner Store and look forward to meeting the growing demand.”

Uber has rapidly gained traction as a reliable but pricey alternative to traditional taxi services. It recruits citizen drivers to shuttle people to their destinations using a mobile app, through which the passengers also pay for their rides.

Expanding to delivery
Uber described the service, which launched Aug. 19, as a limited-time experiment but also indicated it was considering expanding its area of service. It is not charging a fee for the service during the testing phase, and simply deducts the cost of the items from the user’s Uber account.

“Both Google Shopping Express and Instacart have proven that there’s real demand for immediate delivery,” said Bill Bishop, chief architect at Brick Meets Click, Barrington, IL. “Since Uber already has high visibility and great penetration with the shopper segment that has more money than time, this could prove to be a strong growth engine for them.”

Mr. Bishop is not affiliated with the Uber effort but agreed to comment based on his expertise in ecommerce, consumer packaged goods and retail.

Adding instant product delivery to its service offering could eventually put Uber in competition with services such as Instacart. That company offers a platform that also leverages a network of citizen shoppers/drivers who pick groceries from participating retailers and deliver them to consumers on demand.

Google Shopping Express, meanwhile, has expanded to Los Angeles and New York after its debut in San Francisco and the Silicon Valley area in 2013. Like Uber, Google Shopping Express offers the opportunity to conduct business through its apps.

It was not immediately clear where Uber is picking the items, which is a key variable in the delivery-on-demand efforts seeking to solve the costly last mile between the retail outlet and the consumer. Grocery-delivery services have long struggled to fulfill this aspect of home delivery in a cost-effective manner. 

“The question today in online delivery is whether the long-term answer is to build a physical network of distribution centers like Amazon, or to build a service without the investment in inventory and physical sites like Google and Instacart,” Mr. Bishop said. “Companies are making big bets without knowing the answer.”

Final Take

Mark Hamstra is content director at Mobile Commerce Daily, New York