Uber, Walmart to End Online Delivery Pact After Two Years

(Bloomberg) -- Walmart can’t call an Uber anymore.

Uber Technologies Inc. is ending a two-year-old pact to have its drivers handle grocery deliveries for Walmart Inc. across four U.S. cities, Walmart spokeswoman Molly Blakeman said Tuesday. Uber’s final day will be June 30 and deliveries in those markets will be handled instead by Walmart’s other providers including Deliv, DoorDash Inc. and Postmates Inc.

“Customers shouldn’t notice any difference as the transition takes place,” Blakeman said in an email. Uber spokeswoman Ellen Cohn said the decision reflected its move to end the four-year-old UberRUSH program and expand newer services like Uber Eats, which is now delivering from more than 100,000 restaurants across more than 200 cities globally.

The defection is a hiccup for Walmart’s online grocery service, which is expanding this year from six cities to more than 100 markets to battle Amazon.com Inc., Instacart Inc.’s network of grocers and Target Corp. The program has been a hit with shoppers, and Walmart sees it as a way to get more of its regular customers buying online, where they spend twice as much as in the store. Walmart’s web business stumbled from logistical snafus during the holiday period, so investors are looking at next week’s first-quarter results to show some improvement.

Uber handled deliveries in Dallas, Phoenix, Tampa and Orlando, with customers paying a $9.95 fee with a $30 minimum order. Walmart executives always called the Uber arrangement a test, along with other experiments, like asking store employees to deliver orders on their way home after work. Walmart also had a short-lived pilot with Uber rival Lyft Inc., which ended in 2016.

Walmart could also look to handle deliveries on its own, possibly through an acquisition, according to Kantar Retail analyst Robin Sherk. Last year Target acquired Shipt to help expand its delivery capabilities.

“Same-day demands are not going away, particularly as online grocery accelerates,” she said.

The termination of the Walmart-Uber deal was reported earlier by Reuters.

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