Uber is betting on electric vehicles, launching a refreshed package delivery service that uses electric scooters. The company, which has been operating in SA for a decade, says this is part of its global ambition to be carbon neutral by 2040.
Nakampe Molewa, GM of Uber Eats for Sub-Saharan Africa, explains the business’s shift to become a logistics operator, open to third-party businesses, beyond its core in food delivery.
Is food delivery still important to Uber Eats’ business in SA?
When people think about us they think “Eats” and they automatically assume something to consume. The restaurant and food industry continues to be very important to our business, just as in the economy it continues to be a huge sector, so there’s no way we’re going to ignore that and in fact we are going to double down on it.
We’re making sure that we grow, and especially in the SMB [small and micro businesses] sector. These are the small mom-and-pop restaurants, the local favourites that are in certain neighbourhoods, to make sure that those are brought on to the platform, they’re fully participating and giving them the same sort of air time and prominence, advertising, promotions like we do with our big branded partners.
What can be done with this new capability?
There are lots of use cases for this platform. The broadest way to think about it is: can something be moved from A to B and if it can, we could potentially do that.
For us, instead of looking at ourselves as “Uber Eats” per se, we are now “Uber delivery”. It’s like a logistics platform.
The easiest way to explain it is to think about a mall for us. And in a mall you have to have various shops selling various items. You have food courts, which are prominent. That’s what we do, we take away food and we deliver it. But there’s other things that the mall will be doing. There’ll be a pharmacy, there will be apparel, there would be huge grocery players who are your anchor tenants. If we think about those lines of business, there’s also items like alcohol.
Ultimately, can we deliver? Can we fulfil last-mile delivery for those? Absolutely yes and this is where we are going. We call this a new vertical. This is a growing part of our business and it’s going to continue to grow at a tremendous pace.
What grocery item or items have proved popular for delivery?
One of the most common things that people order on our platform is ice. That’s the kind of thing you run out to get or call a friend to stop by the garage and find. Again, simple use case, but it tells you the power of the platform. What is it that people are using every single day, what is it that they step out of their houses to go fetch, deliver, buy? Those are the things that we are targeting.
Is it more advisable for a business to invest in its own logistics infrastructure or outsource to the likes of Uber?
That’s a classic “how long is a piece of string question” because your business model depends on the type of business that you run. For example, Checkers are all vertically integrated. They have a store base that is big, they have a huge customer base in SA, so it’s a captive market for them. So it probably makes sense for Shoprite Checkers to have its own delivery business, fully owned.
I’m not saying that’s the best thing, but if I look at it from the outside, it probably makes sense. They have a captive audience.
But if you’re running an SMB, maybe you’re doing 1,000 deliveries a month, would you want to own those assets? Probably not. Maybe it makes sense to outsource. That’s why I say this is a very dynamic conversation because there isn’t a clear-cut answer to say “yes, this model is the best or this model doesn’t work”.
What was the rationale for letting other businesses use your logistics network to fulfil orders?
It’s all very contextual. People do need to sit and think about their business.
[Uber] Direct came out of that. We know that there are certain merchants, certain restaurants that have already set up their own delivery apps. We know that. We know that some of those are local favourites. That customer base loves that restaurant so much, that that is the only place [or app] that they’re going to order from.
They’re not going to come to Uber Eats, they’re not going to go to other competitor’s product. We know. We’re not going to interfere with that.
The way we participate is to say: maybe you guys don’t worry yourself about investing in a lot of bikes that are going to be sitting idle for part of the day because you pay for them, whether you’re using them or not. Let us take that worry off your hands and let us deliver.
Again. Very different business model, but all aimed at fulfilling the same thing. Last-mile delivery.
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