Uber and Costco expanded their Uber Eats delivery partnership nationwide to 47 states, up from 17, making close to 600 Costco warehouses available for delivery. Uber is waiving delivery fees on orders over $60, and Needham & Company says the deal is unlikely to meaningfully move Uber's consolidated results despite rapid growth in its grocery and retail segment.
Costco delivery reaches 47 states
Uber and Costco expanded their U.S. Uber Eats partnership to 47 states, up from 17, according to a Wednesday press release. The expansion makes nearly 600 Costco locations available for delivery to members of the warehouse club.
Shoppers must verify their Costco membership before purchasing through Uber Eats, and all Costco items are available for delivery, an Uber spokesperson confirmed. As part of the deal, some members can get a discount on Uber One, Uber's paid membership program, and customers can buy Costco memberships directly through the Uber Eats app.
Andrew Macdonald, Uber's president and chief operating officer, said Costco is "one of the largest and most trusted retailers in the country for good reason." Costco did not immediately respond to a request for comment.
Uber waives fees as grocery bookings jump
Uber is waiving delivery fees on orders over $60 as part of the expanded partnership, and Costco now works with two delivery providers in the United States. According to Needham & Company, Costco joins other grocers added to Uber's platform this year, including Stop & Shop, Food Lion and Lowes, and Uber's grocery and retail segment has reached $15 billion in gross bookings, growing more than 40%.
Needham said it is doubtful the Costco partnership will be a meaningful growth driver for Uber's consolidated global results, despite the segment's expansion.
Competition intensifies as DoorDash rumor swirls
Rumors of a DoorDash-Costco deal emerged Tuesday, sending shares of Instacart parent Maplebear down 5.4%, compared with a 0.5% decline in the S&P 500. Needham said the implications for Instacart remain similar with Uber's partnership in place instead of DoorDash's.
The move comes as Uber Eats faces increasing competition in food and grocery delivery from Instacart, DoorDash and Amazon Fresh. Walmart has also pushed further into the space, launching Walmart Restaurant Delivery in partnership with Subway and Dunkin'.
Sources: Uber Newsroom, Investing.com
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