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Is Uber's Deal With Costco on Nationwide Delivery a Game Changer?
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Key Takeaways
Uber Eats now offers Costco delivery from nearly 600 locations across 47 states, up from 17.
Costco members get Uber One discounts, while eligible $60-plus orders can avoid Uber delivery fees.
Uber says the expansion could lift order frequency, transaction volumes, Uber One adoption and retention.
Uber Technologies (UBER - Free Report) and Costco (COST - Free Report) have significantly expanded their U.S. partnership, making the latter delivery through Uber Eats available to millions of additional customers across 47 states, compared with 17 states previously. Nearly 600 Costco locations are now accessible through the Uber Eats platform, offering both on-demand and scheduled delivery services. Uber Eats is the online food ordering and delivery platform of Uber.
Costco members can use Uber Eats to order a broad range of products, including fresh produce, bulk groceries, household essentials and Costco-exclusive merchandise. The expanded service provides members with another convenient option for completing weekly shopping, preparing for gatherings or addressing last-minute needs.
The nationwide rollout also brings one of the country’s largest retailers to Uber Eats’ growing marketplace. The expansion highlights Uber’s ability to help major retailers broaden their digital reach and meet consumers’ increasing demand for convenient delivery options.
As part of the expanded partnership, eligible Costco members can receive a 50% discount on an annual Uber One membership during the first year, followed by a 20% discount in subsequent years. For a limited period, participating Costco stores and Costco.com will also offer Uber and Uber Eats gift cards worth $100 for $79.99.
Consumers can additionally purchase a Costco membership directly through Uber Eats for a limited time and receive 30% off their first eligible Costco order. Uber One members can access delivery without Uber fees on eligible grocery and retail orders exceeding $60, subject to applicable conditions.
Customers can place an order by searching for Costco in the Uber Eats app, selecting a nearby location and adding products to their cart. Costco members can link their membership accounts during checkout before choosing on-demand or scheduled delivery. Orders can then be tracked in real time through the app. The U.S. expansion builds on the companies’ existing international relationship. Costco is also available through Uber Eats in Canada, Mexico, Japan, Taiwan, France and Spain.
The expanded partnership should strengthen Uber’s grocery and retail-delivery business by adding greater selection and nearly nationwide access to a highly recognized retailer. Costco’s large membership base and strong customer loyalty could attract more users, increase order frequency and support higher transaction volumes on Uber Eats. The membership discounts and fee benefits may also encourage Uber One adoption and improve customer retention. Additionally, selling Costco memberships through the app creates another customer-acquisition channel and deepens Uber’s role in consumers’ everyday shopping.
Last year, Uber inked a deal with retailer Best Buy (BBY - Free Report) for on-demand delivery. This deal brought consumer electronics from more than 800 stores to the Uber Eats platform. After the tie-up, Best Buy customers across the United States can order a wide range of electronics, appliances and tech essentials on Uber Eats for delivery to their doorsteps.
UBER’s Share Price Performance, Valuation and Estimates
Shares of UBER have declined in the low single digits (% -wise) over the past three months. UBER’s shares have outperformed the Zacks Internet-Services industry over the same time frame.
3- Month Price Comparison
Image Source: Zacks Investment Research
From a valuation standpoint, UBER trades at a 12-month forward price-to-sales of 2.25X. UBER is inexpensive compared with its industry.
Image Source: Zacks Investment Research
See how the Zacks Consensus Estimate for Uber’s earnings has been revised over the past 90 days.
View the Zacks #1 Rank List
Image: Bigstock
Is Uber's Deal With Costco on Nationwide Delivery a Game Changer?
Key Takeaways
Uber Technologies (UBER - Free Report) and Costco (COST - Free Report) have significantly expanded their U.S. partnership, making the latter delivery through Uber Eats available to millions of additional customers across 47 states, compared with 17 states previously. Nearly 600 Costco locations are now accessible through the Uber Eats platform, offering both on-demand and scheduled delivery services. Uber Eats is the online food ordering and delivery platform of Uber.
Costco members can use Uber Eats to order a broad range of products, including fresh produce, bulk groceries, household essentials and Costco-exclusive merchandise. The expanded service provides members with another convenient option for completing weekly shopping, preparing for gatherings or addressing last-minute needs.
The nationwide rollout also brings one of the country’s largest retailers to Uber Eats’ growing marketplace. The expansion highlights Uber’s ability to help major retailers broaden their digital reach and meet consumers’ increasing demand for convenient delivery options.
As part of the expanded partnership, eligible Costco members can receive a 50% discount on an annual Uber One membership during the first year, followed by a 20% discount in subsequent years. For a limited period, participating Costco stores and Costco.com will also offer Uber and Uber Eats gift cards worth $100 for $79.99.
Consumers can additionally purchase a Costco membership directly through Uber Eats for a limited time and receive 30% off their first eligible Costco order. Uber One members can access delivery without Uber fees on eligible grocery and retail orders exceeding $60, subject to applicable conditions.
Customers can place an order by searching for Costco in the Uber Eats app, selecting a nearby location and adding products to their cart. Costco members can link their membership accounts during checkout before choosing on-demand or scheduled delivery. Orders can then be tracked in real time through the app. The U.S. expansion builds on the companies’ existing international relationship. Costco is also available through Uber Eats in Canada, Mexico, Japan, Taiwan, France and Spain.
The expanded partnership should strengthen Uber’s grocery and retail-delivery business by adding greater selection and nearly nationwide access to a highly recognized retailer. Costco’s large membership base and strong customer loyalty could attract more users, increase order frequency and support higher transaction volumes on Uber Eats. The membership discounts and fee benefits may also encourage Uber One adoption and improve customer retention. Additionally, selling Costco memberships through the app creates another customer-acquisition channel and deepens Uber’s role in consumers’ everyday shopping.
Last year, Uber inked a deal with retailer Best Buy (BBY - Free Report) for on-demand delivery. This deal brought consumer electronics from more than 800 stores to the Uber Eats platform. After the tie-up, Best Buy customers across the United States can order a wide range of electronics, appliances and tech essentials on Uber Eats for delivery to their doorsteps.
UBER’s Share Price Performance, Valuation and Estimates
Shares of UBER have declined in the low single digits (% -wise) over the past three months. UBER’s shares have outperformed the Zacks Internet-Services industry over the same time frame.
3- Month Price Comparison
From a valuation standpoint, UBER trades at a 12-month forward price-to-sales of 2.25X. UBER is inexpensive compared with its industry.
See how the Zacks Consensus Estimate for Uber’s earnings has been revised over the past 90 days.
Uber’s Zacks Rank
Uber currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.