Aldi and Instacart take on Amazon with an Uber style grocery challenge
German based retailer Aldi, which is doing very well in the UK obviously, has teamed up with US ‘unicorn’ Instacart to deliver the grocery goods in an obvious challenge to Amazon Fresh, Pantry and its other grocery schemes.
The idea is a simple one. You will be able to buy your groceries with Aldi as you would with any online shop. Your order will then be delivered by a freelance deliverer, just like an Uber driver, and you’ll make that arrangement presumably via an app. Pricing of the delivery will depend on availability and demand: the higher the call for the service at any one time will mean a greater delivery fee, it seems likely.
By plugging into the so-called ‘gig-economy’, Aldi is making a statement about how it wants to build a home delivery network. By building delivery on a freelance/flexible group of deliver drivers it can likely avoid much of the expense and onerous red tape but equally it won’t be able to ensure universal coverage. The giggers follow the money and will tend to cluster around the most profitable and active hubs of shopping. A rural drop point isn’t as attractive as five within an hour in a square mile radius.
And it gives the retailer much less control over quality and service. Uber is also, famously, currently unprofitable as it spends investor bucks on growing enthusiastically and expanding into new metropolitan areas.
And regulatory issues also loom large. Are drivers self-employed or employees? And what about licences and health and safety and insurance? All concern Uber and will also affect firms approaching logistics using ‘gig economy’ workers.
There is an attraction when it comes to the loose employment approach from firms like Uber and Deliveroo that was highlighted to me by an Uber driver recently. He said: “I’m a student. I won’t be doing this forever. Right now it works for me and pays for my studies. It’s entirely flexible.” I can appreciate his enthusiasm of the free capitalism opportunities in his circumstances but it’s also a precarious way to work. Can it be adapted to work for grocery deliveries too? What about refrigerated vehicles?