Uber getting into grocery delivery business in Canada

Uber Technologies Inc. is getting into the grocery delivery business and is using some Canadian cities to help it launch the venture.

The San Francisco-based tech giant said Tuesday that users in Montreal and Toronto can now order groceries through its Uber and Uber Eats apps.

"They'll be able to place orders from local merchants and receive them in as little as one to two hours," Daniel Danker, who runs Uber's product team, told reporters.

A demonstration of the new service showed thousands of items available from retailers including Walmart, Metro, Rexall, Costco, Longos, Pet Valu and Well.ca.

The company's foray into the grocery sector comes after Uber advertised in November 2018 that it was hiring a head of grocery product in Toronto.

The company remained secretive about the role, but a year later, Uber's potential interest in a grocery service was a hot topic again when it announced it was acquiring a majority stake in Chilean grocery delivery startup Cornershop.

The deal was held up by a Mexican Competition Authority investigation, but is supposed to close in the coming days.

Competition in grocery delivery market

Cornershop will serve as Uber's partner in the grocery delivery venture, which will launch in more than a dozen Latin American cities alongside the Canadian markets.

Uber faces stiff competition with its new service. Amazon.com Inc. and Instacart are already going head-to-head with supermarket brands like Walmart and Loblaw Companies Ltd.

Uber believes it can edge out some of the competition because it sees groceries as a natural extension of its booming food delivery service and a way for the company to become a one-stop shop for every meal.

Grocery delivery has only become more important during the COVID-19 pandemic because more Canadians have transitioned to work from home and Uber's ride-hailing business is still in "recovery mode," according to Danker.

"I think this would have made a lot sense in a pre-COVID world, but our world has just fundamentally changed and so this represents even more of a huge responsibility for us," Danker said.