By Natalie Lung | Bloomberg
Uber Technologies Inc. is planning to allow participants of federal nutrition and health care assistance programs to pay for food delivery with government benefits, joining rivals like Amazon.com Inc. and Instacart in making online shopping more accessible.
Starting next year, participants in the US Supplemental Nutrition Assistance Program will be able to order food and groceries from the Uber Eats App, the San Francisco-based company said on Wednesday. It’s also working with Managed Medicaid and Medicare Advantage plans to accept flexible spending account (FSA) cards, Flex cards and state waiver payments for food orders.
The product updates are part of Uber’s efforts to increase affordability and access to fresh and healthy food, said Therese Lim, senior director of the grocery and new verticals product at Uber Eats. “We know that food access is incredibly important, especially for under-served communities, food-insecure places or individuals who have disabilities or just even frankly, lack access to transportation that they can use to get to grocery stores.”
SNAP is the is the largest food assistance program in the US, with more than 40 million people receiving benefits in June, according to agency data. The Department of Agriculture has been expanding a program started in 2019 designed to make it easier for food-stamp recipients to shop online. Walmart Inc. and Amazon have been early leaders in the project, and Instacart expanded the number of stores where it accepts online payments from SNAP recipients in 2021.
Uber’s announcement comes on the heels of Instacart’s $660 million initial public offering on Tuesday under the official name of Maplebear Inc., demonstrating investor appetite in the online grocery business. Instacart is the biggest online grocery-delivery company in the US, reporting almost 263 million orders in 2022, but growth has slowed in the first half of this year as consumers return to in-person shopping.
Uber launched Uber Eats app in 2015 and added groceries three years ago, helping the company survive the pandemic when ride-hailing plummeted and demand for meals and groceries surged. The delivery unit now accounts for about half of the company’s total gross bookings.
Uber Eats has racked up about a $6 billion annual run rate in non-restaurant gross bookings on the app, which is available in 31 countries. Instacart, which operates primarily in North America, has an annual run rate of about $2.14 billion, based on the first-half revenue disclosed in its IPO prospectus.
In its announcement, Uber also confirmed plans to launch an AI chatbot later this year to offer guidance for food-delivery customers and help them more quickly place orders. Bloomberg reported in August on the upcoming feature. It will first roll out in the US, Canada, UK, Australia and New Zealand before a global launch next year.
Users will get meal or recipe suggestions by asking the chatbot questions such as “show me spicy Thai dishes under $20” or “show me 3 meals for the week for less than $100 in groceries,” and then order the relevant items in the same interface.
Instacart and DoorDash have also been incorporating more conversational AI in their consumer-facing products.
Uber has made investments to better enable machine prediction in other parts of the app, Lim said. That includes collecting vast amounts of data for each food item so that the app makes suitable replacement suggestions when something is out of stock, or provides reorder recommendations when a similar product that a user previously ordered is available at another retailer they are shopping at.
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