Uber is coming for Instacart

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Uber has rolled out updates to its shopping and payment feature that address three of the most common courier issues: out-of-stock items, digital payments, and order clarity before accepting a ride.

The ride-hailing and delivery giant quietly launched Shop and Pay last year, a feature that allows delivery drivers to choose to receive rides to deliver groceries or other retail errands for customers before delivering the orders to customers. In fact, it’s Uber’s attempt to follow the Instacart model that works well for the established grocery delivery company. Instacart reported an increase in revenue and profit in the fourth quarter of 2022, supported by the growing consumer trend to buy groceries online instead of in-store.

Since launching six months ago, Uber says nearly 200,000 couriers are actively shopping in the US each month. For reference, more than 600,000 people work for Instacart as shoppers, according to Business of Apps usage data.

Uber sees a huge opportunity to scale that number and expand its grocery delivery pillar — just part of the company’s plan to cross-sell customers across the platform, from food delivery to grocery delivery, groceries to alcohol, alcohol to experiences , experiences to drive.

(See: The Amazonization of Uber)

A critical factor in this plan is making sure that drivers, or “shoppers” in this case, don’t absolutely hate the job – hence the app updates.

“Customers are a key ingredient to the success of Uber’s grocery delivery ambitions, and we’re making great strides, but we still have a way to go,” said Meghan Casserly, Uber’s chief of communications for delivery. “…but when compared to the more than 5.4 million drivers on the Uber platform worldwide, you see the opportunity to convert even a fraction of them to add shopping trips to the mix.”

Finding ways to make the shopping experience as convenient as possible for a customer is in Uber’s best interest in increasing the take-up of its offerings. Not only do customers have to deliver the orders, but they also have to go into the store, ask customers questions, pay for orders, and decide what to do when there’s no more ginger-lemon kombucha.

The first update provides shoppers with a solution for out-of-stock items. Uber said this was consistently the No. 1 point of dissatisfaction in surveys, with as many as one in five grocery orders having at least one out of stock. Figuring out a possible replacement is not only an annoying addition to a customer’s mental load, but it can also lead to customers wasting time picking out a replacement. That’s a problem because customers don’t get paid based on how much time the gig takes – they accept the rate Uber gives them when they accept the gig, so time is of the essence.

Now when a customer tells the app that they can’t find the originally requested item in the store, the app shows them a list of suggested replacements based on similar brands or items to speed up the decision-making process. Shoppers can then send that suggestion directly in the app to the customer for review. Instacart has a similar feature, where a driver can choose between replacement suggestions prompted in the app, and the customer can approve the replacement on their end.

Uber has also found an obvious solution to give its drivers a physical credit card that is pre-authorized to cover the cost of orders they shop for. Drivers complained about having their cards declined, leaving them with the uncomfortable decision of either canceling the order and wasting their time, or paying out of pocket and rolling the dice for a refund.

Now customers across the US can activate a digital card on their phone using Apple or Google Pay. Uber said in a recent survey that 92% of shoppers found digital payments easy to activate, and 88% said it was easy to checkout.

By comparison, Instacart launched a Mobile Checkout option in 2020 with Apple Pay and Google Pay, but drivers have said they’ll still need to use the physical card if the order exceeds the price limit.

Finally, the new update from Uber gives drivers more clarity about an order before they accept it. Shoppers can see the number of unique items in an order, rather than just the total number of items. The example Uber gave in a blog post was that it’s helpful for a driver to know if he’s picking up one or five gallons of milk so he can decide if that order will actually fit in his car.

Soon Uber said the “offer card” will also provide shoppers with information about the order, such as whether it contains large, heavy or fragile items.

Instacart hasn’t confirmed what kind of information is on the shopper offer card, but based on a few YouTube videos from shoppers, it seems that shoppers are getting the total number of items and the total number of units (e.g. there are four items but five units because a customer ordered two of the same yoghurts), as well as a short preview of some items on a customer’s shopping list.

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