Eye on AI - July 10th, 2020
Welcome to Aigora's "Eye on AI" series, where we round up exciting news at the intersection of consumer science and artificial intelligence!
This week, we return to the world of contactless delivery, focusing on the pandemic-driven evolution of the drone and food delivery markets.
The Rise of the Drones
Our journey into the world of contactless delivery begins in the skies. According to The Spoon’s Chris Albrecht, Rouses Market, which has 64 stores along the Gulf Coast, recently partnered with Deuce Drone to test grocery delivery by drone in Mobile, Alabama.
“Rouses’ grocery drone delivery is coming at the right time,” writes Albrecht. “With the pandemic forcing people to stay at home, they are turning to online grocery shopping in record numbers. All of those orders need to be fulfilled whether its through delivery or curbside pickup. Adding fast drone delivery, especially for smaller basket sizes, could ease logistical congestion and make curbside and delivery fulfillment more efficient.”
Rouses’ partnership marks the very first application of grocery-specific drone delivery. While that news may come as a surprise given that only a few years ago it seemed delivery drones were on their way to blotting out the skies, drone deliveries never took off as expected––as of April, the U.S. only had one consumer drone delivery program (Wing’s program in Christiansburg, VA) and one medical drone delivery program (UPS and Matternet’s program in Raleigh, NC). The number has increased significantly in the wake of the pandemic, and should only pick up steam as the need for contactless delivery increases.
Uber Purchases Postmates, Betting Big on Contactless Delivery
Let’s continue with the biggest contactless delivery news of the week: Uber’s acquisition of Postmates, worth a reported 2.65B. Forbes reporter Jennifer Parker described the acquisition best when she wrote:
“... a large unprofitable company is purchasing a smaller unprofitable company, in the hopes that our Covid-era eating habits will continue to ring doorbells in the elusively distant, post-Covid future, therefore setting both companies on a solid path to profitability…. Uber can use its marketplace technology —including routing, dispatching, and dynamic pricing—to help Postmates sharpen its most valuable skill set: facilitating delivery for non-partnered merchants, long considered a competitive edge in America’s food delivery wars,” continues Parket.”
While Uber’s stock had been riding a pre-pandemic high, the rideshare market tanked once the country went on lockdown, with Uber reporting a 2.9 billion dollar loss in this year’s first quarter. UberEats was the company’s one bright spot, which reported a 50% booking increase at the end of June.
Looking to capitalize on a quickly consolidating food delivery market, Uber had planned to purchase GrubHub, a move that would have effectively doubled its market share, until antitrust complications held up the acquisition (Grubhub later sold to Europe’s Just Eat Takeaway deliveries for 7.3B). With DoorDash, the industry leader, planning to go public later this year, Postmateswas the next best option. Uber is betting big the move will shift the competitive landscape in their favor well into the future.
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