Uber aims for Instacart with their grocery ‘Shop and Pay’ options, plus Uber launches new cartop advertising – and what it could mean for drivers. All this and more in our weekly round-up with senior RSG contributor Paula Lemar.
Uber Is Coming for Instacart
Uber has rolled out updates to its Shop and Pay feature that address three of the most commonly raised courier issues: out-of-stock items, digital payments, and order clarity before accepting a trip. The updates were announced at Curbivore in Los Angeles.
The ride-hail and delivery giant quietly launched Shop and Pay last year, a feature that lets delivery workers opt into receiving trips to do grocery or other retail shopping for customers before dropping off orders to the customer’s door. Basically, it’s Uber’s attempt to follow the Instacart model, which is working well for the incumbent grocery delivery company. Instacart reported a surge in sales and profits in the fourth quarter of 2022, buoyed by the growing consumer trend of buying groceries online rather than in-store.
Since launching six months ago, Uber says nearly 200,000 couriers are actively doing shopping trips each month in the U.S. For reference, over 600,000 people work for Instacart as shoppers, according to usage data from Business of Apps.
Uber sees a huge opportunity to scale that number up and beef out its grocery delivery pillar — just one part of the company’s plan to cross-sell customers across the platform, from food delivery to grocery delivery, grocery to alcohol, alcohol to experiences, experiences to rides….
A couple of weeks ago, Uber announced some big changes to the courier experience as far as grocery delivery is concerned.
The changes were made after listening to courier complaints and after seeing what the couriers and customers want most out of the app.
Some of the updates, like being able to pay 100% digitally, might even outpace their biggest competitor—Instacart.
They likely still have a long way to go before truly being able to compete, but Uber is definitely making strides in that direction.
Uber Launches Self-Serve, Out-Of-Home Cartop Ads
Uber’s advertising division Wednesday launched a self-serve ad platform it’s own cartop advertising model, giving drivers a way to earn 15% more revenue and spotlight local businesses.
While the company has offered out-of-home (OOH) media since 2020, the self-service model aims to give small and medium-sized businesses a more affordable way to run ads.
The cities with initial rollouts of Uber’s cartop ads include 3,500 cartops across Boston, New York, Chicago, Los Angeles, Phoenix, Atlanta, and Dallas.
The model is geared toward small businesses in localized markets including real estate, insurance, independent restaurants, and other small businesses.
Advertisers can geotarget a specific zip code, hours of the day, and days of the week to promote the business and provide a discount or percentage off a purchase….
As a driver for Uber, would you keep a cartop ad going if you could make money from it? How much money would you need to be ok with it?
It is by invitation only, so only the highest-rated, “best”, drivers will be selected to be offered this service.
And you have to be on the road, for Uber or personal reasons, at least 20 hours a week. Makes sense, the company isn’t going to waste resources on a vehicle that no one will see.
I’d be out of the running since I only drive about 5 hours a week on average, but, back in my heydays of driving Uber practically full-time, I would have jumped at this opportunity.
Anything for extra income where I don’t have to physically do anything. Yes, please!
California Court Rules for Uber, Lyft in Ride-Hailing Case
App-based ride-hailing and delivery companies like Uber and Lyft can continue to treat their California drivers as independent contractors, a state appeals court ruled Monday, allowing the tech giants to bypass other state laws requiring worker protections and benefits.
The ruling mostly upholds a voter-approved law, called Proposition 22, that said drivers for companies like Uber and Lyft are independent contractors and are not entitled to benefits like paid sick leave and unemployment insurance. A lower court ruling in 2021 had said Proposition 22 was illegal, but Monday’s ruling reversed that decision.
“Today’s ruling is a victory for app-based workers and the millions of Californians who voted for Prop 22,” said Tony West, Uber’s chief legal officer. ”We’re pleased that the court respected the will of the people.”
The ruling is a defeat for labor unions and their allies in the state Legislature which passed a law in 2019 requiring companies like Uber and Lyft to treat their drivers as employees….
Once again, Prop 22 is in the news. Ever since its inception in 2020, this new way of life for rideshare drivers in California has been questioned about its validity.
It goes with the ongoing debate of whether or not drivers should be considered independent contractors or employees in their current conditions with Uber, Lyft, and other gig platforms.
With this new ruling, the courts sided with Uber, Lyft, et al., in that drivers can be treated as and considered to be independent contractors.
One of the drivers who filed the lawsuit, Mike Robinson, stated,
“Our right to join together and bargain collectively creates a clear path for drivers and delivery workers to hold giant gig corporations accountable. But make no mistake, we still believe Prop 22 — in its entirety — is an unconstitutional attack on our basic rights.”
The fact that drivers cannot set their own rates is one reason many drivers feel they are treated more like employees than independent contractors.
Many also believe that drivers should be allowed to unionize to fight for collective bargaining rights. With Prop 22 in place, this will likely not happen.
One big clue that the proposition did not necessarily have the best interests of the drivers in mind is that it was largely funded by Uber, Lyft, and other gig platforms.
RSG’s Sergio Avedian shared his take on the effects of Prop 22 in his article Food Delivery vs Rideshare Driving and How Prop 22 Impacts My Earnings.
No matter what Uber and Lyft throw at him, he finds a way to keep earning at a maximum.
A Driver Spent $180,000 to Start an Uber Black Business. Then the Company Deactivated His Account.
Miguel Abreu, a ride-hailing driver, bought a Chevy Tahoe for about $80,000 last summer. He spent about $10,000 getting a commercial license and hiring an accountant to set up a luxury Uber Black business, then bought a Mercedes for $90,000 and lined up another driver for that vehicle. Then, in early December, Uber Technologies Inc. deactivated his account.
Abreu, of Lynn, Mass., told MarketWatch the company kicked him off the Uber UBER app permanently because it suspected he was splitting his account, meaning two people were driving for one account.
One day, Uber asked Abreu to prove he was at the airport, so he sent the company a photo of himself. He was then told the photo’s metadata showed him as being somewhere else. That somewhere else was on an island unreachable by car, pointing to an obvious mistake, he said. Yet after seven years of driving for Uber, he found his account deactivated.
Abreu tried to plead his case a few times by going to the company’s office in Saugus, Mass.
“How could that be?” Abreu said he told Uber. “You know I’m an Uber Black driver. I bought this expensive car; I got a commercial license. I shouldn’t just be deactivated.” Uber Black is the company’s premium service — which, among other things, requires drivers to have higher ratings, commercial licenses, and newer cars, and lets passengers reserve rides up to 30 days in advance….
Ouch. But also glad that he’s back on the platform. I’m a bit concerned for him. He’s saying he’s creating a business. But is he making sure these drivers he’s hiring have their own Uber accounts?
The article really doesn’t go into detail about these other drivers and their roles.
But if he’s trying to make it a business, one would assume the earnings they make would partially come to him, and how would that work if they had their own accounts?
I hate to be that person, but I kind of agree with Uber on this one that it’s fishy. Especially if he is trying to have multiple people using his account. Tread lightly!
Is Inflation Deflating Your Wallet? Tax Tips From A Rideshare Driver
Inflation has dealt a blow to many of our bank accounts. Some of the most impacted are gig workers. These self-employed people often incur personal expenses for items that fuel their income.
On this episode, Daniel and Lauren talk with a rideshare driver, contributor, and live stream show host for The Rideshare Guy, and author of several articles on the gig economy, Sergio Avedian.
He offers advice for the self-employed on how to be financially wise while working and filing taxes. Then TurboTax Expert Joseph Bedford dives into how inflation might impact your taxes and what expenses might be deductible….
Check out this podcast on Friends with Tax Benefits, featuring RSG senior contributor Sergio Avedian, with tax tips for rideshare drivers.