Uber Market Delivery Service: Project Outline and Feasibility Study

This project proposes the development of a delivery service for Uber to provide deliveries of groceries, health supplements, and medicines from supermarkets, pharmacies, and health shops in the UK. The project outline includes establishing a network of fleets, negotiating with stores, making modifications to vehicles, establishing contracts, implementing technology, and providing driver training. The feasibility study assesses the risks, strategic issues, and gaps in skills, technologies, and information needed for the business.

Uber Market Delivery Services Project
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Uber Market Delivery Services Project
Contents
Introduction...........................................................................................................................................2
Project Rationale...................................................................................................................................2
Contextual Analysis...............................................................................................................................3
PESTLE Analysis..............................................................................................................................3
Porter’s Five Forces...........................................................................................................................4
Core Competence..............................................................................................................................5
Project Outline.......................................................................................................................................5
Business Case........................................................................................................................................6
Feasibility Study....................................................................................................................................6
Conclusions...........................................................................................................................................7
References.............................................................................................................................................8

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Uber Market Delivery Services Project
Introduction
This project involves development and implementation of a new service by Uber as an
attempt to expand its portfolio. The new service would include deliveries of groceries, health
supplements, and medicines from supermarkets, pharmacies and health shops in the UK.
Project Rationale
Customers today look for convenience and thus, are increasingly adopting online model of
making purchases for grocery and pharmacy items. Many customers in UK demand for same
day deliveries within a few hours from online markets. Grocery being of perishable nature,
faster delivery is of great importance if the products have to be delivered fresh.
Moreover, with internet connections and ecommerce models available even in remote areas,
customers are even present in these locations and order to serve them, organizations need to
have facilities to cover the last mile deliveries. However, if these deliveries have to be taken
care of then it would make it very expensive for the company to keep own vehicles for the
work. Thus, many retailers choose to hire third partly logistics service provider to take care of
the deliveries till last miles.
Uber has a huge number of vehicles in its fleet that are used for passenger transport. With its
entry into the delivery business, these vehicles could be used for making deliveries from
super stores to the customer locations that would provide an opportunity to gain more
revenues from Uber. The facilities can be offered even to pharmacies and health stores to take
care of their last mile deliveries. With this service, supermarkets, pharmacies and health
stores would be able to offer online sales to their customers and make deliveries on time
using the fleet of Uber (Glympse, 2017).
The mission of the project is to establish a business mode for delivery of goods from
supermarkets, pharmacies, and health stores to customers as a service provided by Uber. The
goals of this project are:
 Establish a network of fleets to provide transport services for the stores
 Get more stores to use the delivery services in order to increase the revenues from the
business for Uber
 Provide last mile delivery services to online customers for grocery, medicines, and
health products (Ladd, 2018)

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Uber Market Delivery Services Project
Contextual Analysis
PESTLE Analysis
Political: UK has left EU and this decision of Brexit has affected the nations in various ways
such as increased uncertainty in profit margins, threats to terrorism growing for stress located
in UK, increase taxes from government on the goods sold, and revision of consumer
protection rights.
Economic: The exchange rates of pound compared to other currencies are fluctuating which
affects the bargaining power of stores with the suppliers. Spending patterns of consumers
have also been changing such that some goods are increasingly preferred while others
consumption is going down. Establishing and operating a manufacturing unit has become
costlier and thus, suppliers of products that stores would be accommodating have increased.
This reduces the margins of the stores. With reduction in margins, investing in logistics
through third party delivery services could become difficult for a few stores that do not have
huge sales.
Social: UK is a highly diverse region in terms of culture and thus, consumers present a large
different in segments. People working in UK do not want to work with minimum wages and
look for good salaries which can affect the hiring. Moreover, consumers have to be
understood by doing research on them so that diversities can be explained and channelize
upon to build appropriate strategies for inclusion. To be able to do that stores need to be
staffed decently and this makes retail more of a people driven business.
Technology: In-store buying is still the more preferred option than the ecommerce purchases
which could present a barrier for the delivery service providers who are most benefited by the
online ordering systems. However, large retailers have ecommerce stores catering to
increasing population in the age group of 40 to 60 that are becoming more savvy towards one
buying. They also use smart phone applications to make purchases. Use of technology would
need the third-party service provider to have a sound system for integration so that the two
businesses can be aligned well.
Legal: The minimum wage rate in UK has increased in past few years and trading needs
contractual flexibility. Thus, when hiring people for taking care of the business of delivery,
the legal restrictions and compliances are needed to be taken care of by Uber. They would
need to take care of the minimum wage terms for their drivers and people hired for takin care
of delivery logistics like loading and unloading. There are also other legal compliances and

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Uber Market Delivery Services Project
rules for grocery and food items that Uber needs to adhere to while operating in UK such as
Food Hygiene Regulation Act 2006 and Hazard Critical Control Point (HACCP).
Considering these, Uber cannot use their regular vehicles without any modifications for food
safety for food delivery.
Environmental: Shoppers are becoming more conscious towards environment and thus,
ethical sourcing is always preferred. T flourish in such a market, Uber would need to have
ethical sourcing policies and strategies build for following CSR (CIPD, 2017).
Porter’s Five Forces
Bargaining power of suppliers: Uber already owns the vehicles that can be used for the
delivery of grocery, pharmacy, and health products. More supplies of vehicles can be
obtained from the people who are the car owners an Uber works on the model of hiring cars
from individuals. To get more vehicles in the network, the company need to offer them
promise of earning. With the new model, the potential of vehicles making more sales can be
increased and thus, it would become easier to bargain with them. Uber is already a popular
platform such that people would have to associate with them. Thus, the bargaining power of
suppliers in this business is low (Rey, 2018).
Bargaining power of buyers: The buyers are the stores that would be taking services of
Uber. For them to take services from Uber, they need to be satisfied with the services and
would have demands to fulfil. Only when Uber is able to cater to their demands would they
consume the services. If buyers are not happy with Uber offers or services then the purchase
of services would not happen. Also, with every deal, the stores would be negotiating the
terms of delivery, prices, and other terms. Thus, it can be said that the buyers of the Uber
services have high bargaining power (UKEssays, 2018).
Threats of New entrants: Getting entry into this business does not take any significant
investment but only availability of vehicles to take care of deliveries. Although, catering to
large stores would need large number of vehicles that may not be easy to acquire for new
companies, but they can always make an entry into the business by targeting the smaller
stores with lower rate offered to penetrate the market. However, Uber being a trusted brand
with large number of vehicles already with it, the new entrants would not be able to compete
in many things directly with Uber. Thus, the threats from the new entrants is moderate
(Crook, 2018).

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Uber Market Delivery Services Project
Threats of substitutes: The substitutes of delivery vehicles are the own store vehicles and
courier services that are easily available. Stores can also hire people making deliveries on
their own or smaller vehicles to their customers. There can be several different options for
stores to consider before they can think of taking logistics services from Uber. However,
other substitutes may not offer some of the benefits that Uber can such as last mile
connectivity and higher coverage. Thus, it can be said that the level of threats from
substitutes is moderate.
Competitive Rivalry: There are several players in the field that compete directly with Uber in
the space such as We Deliver and Home run. However, the industry is relatively new and
stores are only in the process of adopting the business model such that Uber will still have
importunities to take significant market share even in the presence of others in competition.
Thus, it can be said that the competitive rivalry is low in the market of grocery delivery (Burt
& Sparks, 2003).
Core Competence
Project Outline
The objectives of this project are –
 Assess the need for a network of fleets and accordingly allot the vehicles in the
business
 Negotiate with stores to get them into the business so that Uber can provide them
delivery services.
 Establish network and processes to take care of the last mile delivery services to
customers for grocery, medicines, and health products in UK (Statt, 2018)
For this the project would need to execute the following activities:
 Identify the stores in each category to be targeted for business
 Identify the requirements for number of vehicles needed for taking care of deliveries
 Make modifications in vehicles needed to stock the health, medicine, and grocery
products
 Establish contracts with different stores for making deliveries of their products for
their customers

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Uber Market Delivery Services Project
 Implement a system and the technology to integrate the supply chain processes with
the retailers or stores so that Uber delivery team can have instant insights on orders
and can deliver fast services (Thimou, 2018)
 Hire drivers and provide them sufficient training to take care of the deliveries of the
items
The project can be executed along the given timeline assuming that the project would
begin by 7th Nov 2018:
Project task Milestone Date
Targeting 27th Nov 2018
Vehicle modification 31st Jan 2019
Contracts 20th Feb 2019
Technology Implementation 10th Mar 2019
Driver training 20th Mar 2019
Service delivery 1st Apr 2019
Business Case
There are many leading grocery chains such as Amazon, Walmart, Kroger, and Whole Foods
that have thousands of stores in UK and they serve over 500 locations every year for
deliveries. If Uber can take even a part of these deliveries to be made through their fleets, it
would give a huge opportunity to Uber across UK to bring more revenues. Stores operating
on traditional delivery models such as pharmacies and health stores do not even have their
own delivery vans and even if they have, it would not be feasible for them to cover the last
mile deliveries and thus, they would have to be limited in their business to nearby locations.
However, with the last miles delivery service from Uber, these stores can be offered online
order deliveries and last mile delivery options to expand their customer base. The project
would be beneficial both to the stores and to Uber and thus, would bring in significant
revenues for the company (FATbit Chef, 2018).
Feasibility Study
Feasibility of the project can be assessed based on the risks, strategic issues, and gaps
company has in skills, technologies, and information needed for the business. The project can
face the following risks in case the project is executed:

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Uber Market Delivery Services Project
 The company may need to make significant investment on vehicles to make them
ready for the needed deliveries that may not be anticipated and thus, can cause issues
later. This problem can be avoided by careful consideration of all the needs of thee
delivery vehicle and procuring new vehicles in case the existing vehicles cannot be
made ready for certain products
 The company can face accidents on road leading to loss of goods in transit. This risk
can be transferred to another party by taking insurance of the vehicles and the
products being delivered by the company
There can also appear some strategic issues such as:
 The project stakeholders may not be satisfied with the planned project in which case
the company can face resistance. This risk can be avoided by a careful consideration
of stakeholder needs by involving them at start so that their needs are understood.
Major stakeholders for the current project would be the store owners and managers
who should be approached to understand their demands and preferences
 The company can face a lack of resources needed to execute the project. This
situation can be taking care of by proper estimation of need for resources and
providing training to them to take care of business processes. Experienced drivers
may be hired so that they have sufficient experience to take care of deliveries
The drivers of the company may not have sufficient skills to take care of product deliveries
and thus, are required to be trained. Alternatively, the company can hire experienced drivers
from the delivery industry to ensure they have the right skills.
The company already has sufficient tracking technologies but would need to make the
necessary modifications to integrate their processes with the stores on board. The company
already have sufficient resources and assets to be able to do that.
Conclusions
This project proposed development of the delivery services for Uber where the company
would be providing services to pharmacies, health stores and super marketed to make
deliveries of their products to their customers. It was found that the company has sufficient
resources and capabilities to be able to establish the business and gain revenues for growth.

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Uber Market Delivery Services Project
References
Burt, S. & Sparks, L., 2003. Competitive Analysis of the Retail Sector in the UK, s.l.:
University of Stirling.
CIPD, 2017. PESTLE example for retail industry as at July 2017, s.l.: CIPD.
Crook, J., 2018. Walmart to end its grocery delivery partnerships with Uber and Lyft.
[Online]
Available at: https://techcrunch.com/2018/05/08/walmart-ends-grocery-delivery-deal-with-
uber-and-lyft/
[Accessed 2 November 2018].
FATbit Chef, 2018. Setting up Online Grocery Business in 2018? Here Is What You Need to
Know. [Online]
Available at: https://www.fatbit.com/fab/setting-online-grocery-business-2018-need-know/
[Accessed 2 November 2018].
Glympse, 2017. The Curbside Pickup and Grocery eCommerce Renaissance, s.l.: Glympse.
Ladd, B., 2018. Uber Wants To Deliver Groceries, But There Is A Much Bigger Opportunity.
[Online]
Available at: https://www.forbes.com/sites/brittainladd/2018/10/15/uber-wants-to-deliver-
groceries-but-there-is-a-much-bigger-opportunity/#35ba4c5f5c1d
[Accessed 2 November 2018].
Rey, J. D., 2018. Why Walmart is partnering with everyone except Instacart for its grocery
delivery service. [Online]
Available at: https://www.recode.net/2018/4/24/17275286/walmart-grocery-delivery-
instacart-doordash-postmates-deliv-uber
[Accessed 2 November 2018].
Statt, N., 2018. Walmart’s new Spark Delivery service is an Uber-like platform for groceries.
[Online]
Available at: https://www.theverge.com/2018/9/6/17828028/walmart-partners-bringg-
logistics-platform-grocery-delivery
[Accessed 2 November 2018].

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Thimou, T., 2018. Here’s how to get groceries delivered right to your door from Walmart.
[Online]
Available at: https://clark.com/shopping-retail/walmart-uber-lyft-grocerydelivery/
[Accessed 2 November 2018].
UKEssays, 2018. Business Analysis The Uk Grocery Industry Marketing. [Online]
Available at: https://www.ukessays.com/essays/marketing/business-analysis-the-uk-grocery-
industry-marketing-essay.php?vref=1
[Accessed 2 November 2018].