Woolworths has inked a deal with Uber that will see the latter’s gig economy contractors utilised for grocery deliveries amid the COVID-19 pandemic.
From today, Uber drivers will begin delivering grocery orders out of three stores in Townsville, Queensland, ahead of a planned expansion in coming weeks.
The service will be next-day delivery and capped at 40 items, with Woolies picking and packing before handing over to Uber for fulfilment.
The deal is Uber’s first major partnership after launching a business-to-business fulfilment network Down Under earlier in April.
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The tech giant hopes to cash in on massive delays in parcel deliveries in the face of the coronavirus, and also make use of spare capacity from its network of ridesharing drivers.
Rideshare demand has been savaged by social distancing orders, and drivers — lacking protections and entitlements associated with an employment relationship — report struggling to make ends meet.
While Woolworths usually handles its own logistics, the supermarket giant is itself struggling to keep up with skyrocketing e-commerce demand recently, having suspended usual operations for most of April to prioritise vulnerable shoppers.
“The demand for our home delivery service has grown at an unprecedented rate across Australia in recent months,” Woolworths director of e-commerce Annette Karantoni said in a statement circulated Monday.
“As the COVID-19 situation continues to evolve, it’s vital we keep scaling our delivery capacity to meet the essential needs of our communities.”
Uber’s general manager for Australia and New Zealand, Dom Taylor, said the deal would provide new opportunities to contractors.
“We look forward to using our platform to support Woolworths and the community and at the same time provide additional earning opportunities for driver partners,” he said in a statement circulated by Woolworths on Monday.
The prospect of extra work is promising for drivers, says Rosalina Kariotakis, president of the Rideshare Drivers Association of Australia.
But the devil will be in the detail, particularly around wait-time pay — a contentious issue among parcel delivery contractors in the United States.
“It’s a positive, provided the drivers are paid for their time in waiting,” Kariotakis tells SmartCompany.
Uber said minimum fares will “generally be in line” with UberX, but drivers will receive a higher base rate to compensate for extra time and effort in picking up items.
Fares will be based on distance, Uber confirmed.
Kariotakis says she’s hopeful the addition of Woolworths will lead to an increase in deliveries coming through Uber, saying she’s yet to get one of those jobs.
“I’m averaging 20-30 hours online a week since it was announced, I haven’t received a single delivery job,” she says.
Rideshare demand has plummeted in the wake of the coronavirus crisis; forcing many drivers to stay logged into the app from their homes, waiting hours at a time for a job to come through.
“I’d say rides have probably reduced by about 75%,” Kariotakis says.
This story was updated at 12:30PM with comment from Uber after it became available.