As the fog starts to lift and we all head out more without face masks, what will be retained from our past 15 months of experience? Some businesses and sectors are poised to grow, while small businesses and age-old brands may continue to shut down.
Mobile-app based services were in place by 2015 with Uber and Lyft driving a lot of taxis out of the market. Food delivery and grocery shopping and delivery followed close behind with brands like Grubhub, DoorDash, Postmates, and Instacart becoming known and tried out by consumers — mostly Millennial and Generation Z at first, followed by their parents.
Those that have thrived during the pandemic have been clearly in demand by people stuck in their homes, according to a few economists, analysts, and business publications.
Markets and companies that have done well during Covid 19
- Streaming services led by Netflix, and those seeing fast growth such as Disney+
- Online courses
- Video game sales
- Amazon
- Walmart
- Zoom
- Hand-sanitizing products
- Tesla
- Instacart
- DoorDash
Tesla continues to boom with consumers who have retained their jobs and personal wealth, and need to get out of their original Tesla vehicle or add another one. That includes markets outside the US.
You’ll notice that Uber and Lyft are not on this list, as the two companies were hit hard with riders not wanting to take the risk of getting in a car possibly driven by someone who’d tested positive for the virus; and vice versa. But they’re expected to come back, and Uber is pleased to see that it’s food delivery unit, Uber Eats, has been doing very well lately.
Bloomberg Second Measure reported that in April, DoorDash had 56 percent of the US market for restaurant/fast food delivery, Uber had 26 percent with UberEats at 21 percent and Postmates at 5 percent, and GrubHub had 18 percent. Postmates was in a much stronger position about five years ago, but has steadily been losing share in part by trying to delivery anything — groceries, auto parts, pharmacy drugs and over the counter medications, meals, and specialized wine and beer/ale stores. Some observers wonder if Uber did that acquisitions to diminish competition on the food delivery side.
On the grocery delivery side, Instacart has the lead, but Walmart is at a close second. The two companies have also entered into a marketing alliance to get more customers to shop online at Walmart using Instacart for the delivery. Shipt, which is owned by Target, had a good run two years ago after it launched, taking share from Instacart in a few cities but that’s been in decline for a while.
What could come out of all this? It’s still getting worked out. Last year, Uber took steps on organizing meal delivery through buying Postmates and beefing up Uber Eats, which is on its own app separately from Uber rides. Uber drivers are getting better paid now as more of it gets transferred over from what Postmates used to serve.
Uber is pushing Eats Pass, a $9.99 per month subscription service that charges $0 delivery fee at eligible restaurants, though you’ll still get charged service fees. The other benefit is 5 percent off orders over $15 at eligible restaurants. Unlike TV subscription services like Paramount+ where you have to subscribe or you won’t get to see The Daily Show, the Late Show with Stephen Colbert, or many other programs unless you pay, you can take the Eats Pass plan or stick with what gets charged for individual orders. Amazon is creeping along with its Whole Foods Markets chain and its own Amazon Fresh grocery deliveries. Amazon.com offers free two-hour delivery and one-hour pickup of Whole Foods Market items with a Prime membership. But its one of many services Amazon would like you to try out for its all-encompassing, multi-tier strategy. Amazon doesn’t seem to be clearly committed to dominating healthy and organic grocery shopping, pickup, and delivery; but that could happen in the years ahead.
Consumers are depending more on grocery shopping services. For those of us who’ve had our grocery shopping done and delivered by Instacart, Shipt, or in-house services for grocery store chains, we’re likely to stay with it in some format. For many consumers using Instacart in recent years, that experience has been tarnished by shoppers replacing missing items with something else, whether the customer requested it or agreed to the choice. Shoppers might speed through and pack their shipping carts, deliver the groceries, and jump into the next order. Dissatisfied customers are tapping into alternative delivery or pickup options that are being run in-house by Kroger and its grocery stores, natural and organic grocery store Sprouts, Amazon’s Whole Foods subsidiary, and others. They don’t want to be dependent on Instacart, Shipt, or any other third-party service that may cause them to lose customers.
Market growth is expected to continue long after the pandemic. US gross merchandise value (GMV) sales will more than double to $27.33 billion at Instacart and $27.58 billion at Uber Eats by 2025, surpassing Target.com, whose GMV sales are forecast to climb to $24.44 billion in 2025 from $14.87 billion in 2020, according to a new study by Edge Retail Insight. Target is counting on its Shipt grocery delivery subsidiary taking off, and having more of its customers pull into its parking lots to pick up their online orders made with Target.com.
Will Instacart really bring in robotics? Instacart is making moves in that direction and has been in league with Uber and Lyft committing to get rid of drivers for autonomous vehicles. Earlier this month, Bloomberg reported that it gained access to documents that involve building automated fulfillment centers around the US, where hundreds of robots would collect dry and canned goods while humans could retrieve produce and deli products. Some facilities would be attached to existing grocery stores while larger standalone centers would process orders for several locations, according to the documents.
Instacart would be essentially duplicating Amazon’s model — if it gets carried out. The company has fallen behind schedule, according to people familiar with the situation. And though the documents mention asking several automation providers to build the technology, Instacart hasn’t settled on any, said the sources. Workers will be furious over this move if it rolls out, with many of them depending on Instacart income during a period of time when it’s quite difficult for most people to find a good job.
It got ugly after California ballot proposition: Mobility and food delivery giants rigged the election — Uber, Lyft, DoorDash, Instacart, and Postmates spent over $200 million campaigning for Proposition 22, the most expensive ballot measure in California history, successfully convincing voters to back it. The argument they made — speaking for independent operators to adjust their work lives around their time restrictions. The mother who has to pick up her kids at 3:30, a young man who has to take care of his grandparents, and other sympathetic stories, were told. They might have to disappear from the market if they had to pay workers more and give them benefits. Voters bought into it and passed it into law.
But these companies didn’t attempt to stay in that likable business model. Prices started going up in mid-February with Uber, Grubhub, Lyft, and Instacart, leading the way.
The good times of tapping into these businesses is long gone. It used to be fun to take shared Uber and Lyft rides and chat with drivers and fellow riders. You could get wonderful deals and great service from food delivery services and from Instacart. That’s all changed. If you’ve taken an Uber ride recently, you became distracted and annoyed hearing the bings aimed at getting drivers’ attention — enticing them with another attractive ride right after that customer gets dropped off. But they’re not impressive. Is it really worth it to speed off for another ride when you’re going to make $4 on the short trip? The good times are over for independent contractors.
As for the US economy, these mobile app services are raising the bar on the level of choices and service that consumers can expect for rides, meals, and groceries. But for real economics, there’s little to be gained from investment in the economy and supporting a stable workforce.
And in other news…………
Watching TV and looking for news varies greatly depending on how old you are
Here’s my Time Capsule 21st Century website exploring what it’s like to live in this century. The latest piece looks at a disturbing lack of news and public information accessed by those in Generation Z, along with some of the Millennials. Gaming is very big (much bigger than watching TV, reading, etc.), but somebody in their 20s is more likely to have their opinions shaped by somebody with a YouTube talk show than with traditional media sources on TV, print, and radio/podcasts. Beyond fake news, conspiracy theories, and QAnon, here’s my thoughts on addressing it if we’re interested in continuing the democracy we live in. Good timing for me, as I head into a graduate program in journalism/communications aimed at becoming a college instructor.
Attention Fleet Operators! With the growth of electrified fleets, the subject of infrastructure and especially charging capabilities and management has become increasingly important. CALSTART and member organization AMPLY Power have partnered to assess market knowledge of managed charging strategies across industry. You can follow the link to complete the first of two brief surveys, with the second coming later in the year. Thank you in advance for your participation!
CALSTART Releases Automated Transit Vehicle Readiness Guidelines. Transit agencies across the US are planning for how best to roll out Automated Vehicles (AVs). CALSTART, with support from more than 17 connected- and automated-cohort transit provider members, have developed detailed guidance to planning for and deploying AVs into transit operations. These simple steps can help interested transit agencies successfully deploy transit AVs.
Goodbye Keystone: Canada’s TC Energy Corp. and the Albertan provincial government are bringing the Keystone XL pipeline controversy to an end. The decision had been expected after President Biden used his first day in office to revoke a key permit for the pipeline to cross the country’s northern border, shutting down construction. t marks a historic victory for environmentalists who for a decade have made Keystone XL, which would have run from Alberta to Texas, the focus of a campaign to block new pipeline construction as a way to limit oil consumption that contributes to global warming.
Solar power takes off: The US solar market surpassed 100 gigawatts (GWdc) of installed electric generating capacity, doubling the size of the industry over the last 3.5 years, according to the US Solar Market Insight Q2 2021 report, released today by the Solar Energy Industries Association (SEIA) and Wood Mackenzie. Solar had a record-setting Q1 2021 and accounted for 58% of all new electric capacity additions in the United States. Renewable energy accounted for nearly 100% of all new electric capacity in Q1.
