Even before Walmart stepped into extend its rivalry with Amazon in the Indian market, it seems that its efforts to take on Amazon on its home turf might have suffered a setback. It is being reported that the arrangements that Walmart had entered into with Uber and Lyft, the ride-hailing cab service firms in the US, for making deliveries to its customers have been suspended.
More than Walmart, for the two cab-hiring firms, this failure could mean much since the idea of carrying cargo along with people in their cabs and making the door-deliveries emerged from their side. They had ambitions of expanding their own scope and operation of business with the ultimate objective of increasing revenues.
But they had not probably factored in the challenges a delivery business of this kind would pose. Experts comment that there was no way the two operations could be combined. The existing arrangement for delivering products for Walmart will end with the month of June.
Meanwhile Walmart has moved ahead and brought in new partners to make the last-mile deliveries. Uber will be replaced by other players, Deliv, Postmates and DoorDash, apart from the ongoing delivery arrangements with the regular operations. While handling the delivery of packages containing goods ordered online is one of the most difficult part of any ecommerce activity, the issues magnify in the case of groceries and food stuffs.
For a company like Walmart, which has placed a mighty focus on these categories, reaching the products safely, hygienically and swiftly is very critical to retain its customer base. Any slip-ups here can upset the customers and they will switch to competition. The last-mile delivery operation poses different problems in different places depending on the terrain, the density of population and the type of vehicle the delivery person uses.
Amazon has been able to put in place a more reliable delivery system thanks to its acquiring Whole Foods Market Inc., a pureplay grocery and foods company.
Uber, however, has said it will close down the Uber Rush division handling these food and grocery deliveries, will continue with its Uber Eats which is a dedicated food delivery platform, which is already contributing substantially to its overall revenue.