One of the gig economy’s biggest stories earlier this month was Uber acquiring alcohol delivery start-up Drizly. The price tag for this acquisition was $1.1 billion in stocks and cash. Only 10% of the $1.1 billion was in cash. The rest was stocks. At the announcement of this acquisition, Uber’s stock price jumped as much as 7%.
If you recall, in July of 2020, Uber acquired Postmates for $2.65 billion. Both companies finalized the deal in December. So what is the plan? Why is Uber buying Drizly? Is Uber just killing off potential competitors with acquisitions? It doesn’t seem that this is the strategy.
Uber’s Rideshare Wrecked By COVID-19
The COVID-19 pandemic has hit the rideshare industry hard. Demand for rides plummeted as much as 80% in April of 2020. In November, the Wall Street Journal reported that Uber’s rideshare booking declined 53% year over year in 2020. Meanwhile, its food delivery arm saw order volumes more than double. And Uber lost another billion dollars ($1.09 billion to be exact) in that quarter.
Uber has responded to the Coronavirus by cutting staff by 3000 and shutting down 45 offices. What else did Uber get rid of? It sold its self-driving car unit to Aurora Innovation. Then the flying taxis were next. That got sold to Joby Aviation.
So it’s acquiring and selling off. What’s the goal here?
Uber Is Becoming More B2B
If you pay attention, you’ll notice a pattern here. Uber is getting rid of consumer-facing businesses and buying up or partnering with brands that allow it to move toward the business-to-business (B2B) sector.
A lesser-known story is Uber’s partnership with Bringg at the beginning of 2021. Bringg and Uber partnered to “improve the retail delivery experience for customers across the world.”
Bringg is a delivery and fulfillment cloud platform provider. The press release for that partnership stated this:
“Through this partnership, which covers retail and B2B sectors, Bringg’s customers now have seamless access to drivers through Uber Direct, which enables them to provide same-day and next-day delivery, without needing to sacrifice key delivery elements like branding, measurement, visibility, or quality.”
This partnership is a total B2B move.
If you look at the list of moves made by Uber in the last two years, it’s clear. Uber is becoming more B2B globally, and the pandemic just accelerated this agenda.
Before the pandemic was in full swing, Uber had brought majority ownership of Cornershop. This moved Uber into the grocery space in South America and Canada. In April, this grocery shift accelerated in Europe as Uber moved into grocery because of COVID.
Uber is becoming more a global B2B brand that leverages the independent contractor model.
What Can Drivers Expect In The Future?
Uber is going to get much more political globally to maintain the independent contractor model. Props 22 in California isn’t the end of it. Already we’re seeing Uber lobbying and striking deals in Europe over worker rights.
Uber recently published a white paper called “A Better Deal” in its lobbying efforts in Europe. Worker rights advocates heavily criticized it.
Before this, Uber was lobbying for more Prop-22 style work in Europe.
For drivers, there will be a ton of gigs available on the Uber platform, including rideshare, food delivery, grocery delivery, trucking, and now with the acquisition of Drizly, alcohol delivery. But if Uber wins the battles it’s fighting right now; wages will not go up. Drivers will have lots of opportunities to make very little.
