Uber to Unveil Big E-Commerce Delivery Program With Retailers in the Fall

For at least a year, Uber has experimented with transporting packages in addition to people. Now it’s ready to make the arrangement more formal.

The popular ride-hailing service is planning a partnership announcement this fall with big retailers and fashion brands that could number in the dozens, as it looks to make Uber an express delivery option for shoppers on a wide range of shopping websites and apps, according to three sources. Uber could announce the partnerships as soon as late September or early October, these people said.

Two people familiar with the rollout say it will start in New York City and include among its partnerships some flashy, luxury brands whose flagship stores are usually found on or around Fifth Avenue in Manhattan. Partnerships with retailers in San Francisco will be announced at the same time, or soon after, another source said. It’s not clear which specific retailers and brands will be included in the initial launch.

In an effort to increase its number of partners, Uber has also been in talks with software companies like Bigcommerce and Shopify, which help small businesses set up online storefronts. Uber’s thinking, according to sources, is that by integrating with these software companies, it can make its delivery option available to a large number of small brick-and-mortar stores — potentially thousands in San Francisco and New York alone — without having to integrate with each and every one.

Spokespeople for Uber, Bigcommerce and Shopify declined to comment.

The launch comes as Uber continues a rapid expansion of its core ride-hailing service around the globe, while simultaneously nurturing its UberRush messenger and UberEats meal delivery services in a handful of American cities. These non-core initiatives have rolled out slowly, but neither has been slower-moving than its efforts with retailers. The company has only announced a handful of partnerships with retailers since last year and ran into problems with its efforts for online retailer Gilt Groupe and luxury jeweler Alexis Bittar, according to a Wall Street Journal report. But if it wants to live up to its hype as the logistics network of the future, it will need to turn its delivery businesses into real businesses.

In recent months, sources say pressure has been building on Uber’s new-business unit, known internally as UberEverything, to sign up a large group of retail partners. The UberEverything team operates separately from the core business with a leadership team run by Jason Droege that reports straight up to CEO Travis Kalanick.

In June, the group hired longtime business development executive Sunil Daluvoy, who has experience partnering with retailers, to run business development for the unit. He worked at Google for seven years, where one of his projects was helping to launch the Google Wallet mobile payment service and close the initial partnerships, according to Daluvoy’s LinkedIn bio. Most recently he was business development chief at Euclid Analytics, a software startup that aims to help retailers track foot traffic and where their customers spend the most time in their stores.

The retailer partners will add an Uber same-day delivery option to their websites and apps that will only show up for online shoppers in the right zip codes, according to sources. Some retailers may choose to pass along Uber’s delivery fee to shoppers, while others may choose to eat the cost, especially for high-priced orders. Customers will not be able to order products from retailers through the Uber app, at least not at launch, one source said.

Deliveries may be made by bike messenger or car, depending on the market, with messengers and drivers picking up orders from retail stores. TechCrunch previously reported that Uber was in talks with a wide range of merchants and had already developed training materials for its messengers and drivers.

Several people familiar with the program believe that Uber chose some of the initial partners as much for marketing purposes as for real revenue-generating potential. That’s why it targeted some high-end fashion brands with well-known names, even though they typically do little to no same-day delivery business via their e-commerce sites.

There is also competition for the same-day delivery business of retailers who do offer that option. A startup called Deliv, for example, counts several mall companies as investors and offers same-day delivery for Macy’s, Foot Locker and 1–800-FLOWERS. Some retailers prefer Deliv’s service because it is white-labeled and focused exclusively on the retail sector.

Another delivery startup, Postmates, which has partnerships with Chipotle and Starbucks, specializes in food delivery but also has some partnerships with e-commerce brands such as Everlane.

Originally published at recode.net on September 4, 2015.