Walmart to end its grocery delivery partnerships with Uber and Lyft

Online grocery delivery and ridesharing services is a bad match, if Walmart’s experience is anything to go by.

The retail giant will soon end its delivery experiment with Uber and Lyft, Reuters reported on Tuesday.

Described by the news outlet as “a potential setback for the retailer’s ambitions to challenge Amazon,” the last-mile delivery service for online shoppers, which saw Uber and Lyft cars swap people for groceries, has been running since 2016.

Delivery operations will end on June 30, with Uber saying the closure is part of its decision to shutter UberRush, its delivery service for a range of online merchants. But it said it will continue to operate UberEats, which delivers restaurant meals to a person’s place of work or home. Lyft has yet to comment on the decision.

Sources with knowledge of the matter told Reuters that the logistics of delivering both people and groceries had proved too challenging, prompting the decision to end the scheme.

The news will come as a surprise to some, as just a couple of months ago Walmart announced that Uber would play a role in its plan to deliver groceries to nearly half the country. Reuters’ source said there was “clearly some lack of communication there.”

Uber drivers have been delivering groceries to customers’ homes in Phoenix, Tampa, Orlando, and Dallas, while Lyft’s trial never expanded beyond Denver. The system allowed Walmart to notify an Uber or Lyft driver of an available home delivery of groceries. When the driver collected the order, Walmart notified the customer to let them know their shopping was on its way.

Walmart doesn’t seem too fazed by the ending of its partnerships with the ridesharing services, insisting that it has other providers who can take their place. These include startups such as  Deliv, Postmates, and DoorDash, all with experience of delivering goods as opposed to humans.

An abundance of Uber and Lyft drivers provided a quick and easy way to expand Walmart’s last-mile delivery operation, or so it thought. But various challenges have evidently proved too much to overcome, causing the very different businesses to go their separate ways.

Walmart will, however, be keen to keep pace with Amazon, which is in the process of expanding its grocery delivery efforts since acquiring Whole Foods last year.