(Bloomberg)—Walmart can’t call an Uber anymore.
Uber Technologies Inc. is ending a two-year-old pact to have its drivers handle grocery deliveries for Walmart Inc. across four U.S. cities, Walmart spokeswoman Molly Blakeman said Tuesday. Uber’s final day will be June 30, and deliveries in those markets will be handled instead by Walmart’s other providers including Deliv, DoorDash Inc. and Postmates Inc. Walmart is No. 3 in the newly released Internet Retailer 2018 Top 1000.
Walmart’s deal with Postmates follows an announcement in March in which the retail giant said it would expand its grocery delivery services to more than 100 metro areas during 2018, up from the current six markets. Walmart’s goal is to offer grocery delivery to more than 40% of U.S. households by the end of the year.
“Customers shouldn’t notice any difference as the transition takes place,” Blakeman said in an email. Uber spokeswoman Ellen Cohn said the decision reflected its move to end the four-year-old UberRUSH program and expand newer services like Uber Eats, which is now delivering from more than 100,000 restaurants across more than 200 cities globally.
The defection is a hiccup for Walmart’s online grocery service, which is expanding this year from six cities to more than 100 markets to battle Amazon.com Inc. (No. 1), Instacart Inc.’s network of grocers and Target Corp. (No. 20). The program has been a hit with shoppers, and Walmart sees it as a way to get more of its regular customers buying online, where they spend twice as much as in the store. Walmart now has 1,200 grocery-pickup points—up from 800 several months ago—and plans to add 1,000 more by the end of 2018.
Walmart’s web business stumbled from logistical snafus during the holiday period, so investors are looking at next week’s first-quarter results to show some improvement.
Uber handled deliveries in Dallas, Phoenix, Tampa and Orlando, with customers paying a $9.95 fee with a $30 minimum order. Walmart executives always called the Uber arrangement a test, along with other experiments, like asking store employees to deliver orders on their way home after work. Walmart also had a short-lived pilot with Uber rival Lyft Inc., which ended in 2016.
Walmart could also look to handle deliveries on its own, possibly through an acquisition, according to Kantar Retail analyst Robin Sherk. Last year, Target acquired Shipt for $550 million to improve its same-day grocery delivery capabilities. Target says its goal is to use Shipt to expand same-day delivery of groceries and other goods to about half of its 1,834 stores by this summer and to a majority of its stores in time for this year’s holiday season. Currently, it is available at about 440 stores.ands are not going away, particularly as online grocery accelerates,” she said.
The termination of the Walmart-Uber deal was reported earlier by Reuters.
Additional reporting by James Melton.