According to a new report, the Federal Trade Commission is probing the recent partnership between grocery delivery service Gopuff and ride sharing giant Uber Technologies Inc. (NYSE: UBER).
Uber looking to partner with Gopuff to expand its Uber Eats business
In May, Gopuff decided to put its grocery and alcohol store products on Uber Eats, boosting Uber’s delivery capabilities even further as it competes with startups like Instacart and DoorDash. Reports indicate that the FTC is wary that the deal could hinder competition in the online alcohol and convenience products sale and delivery.
In recent times Gopuff has been expanding its reach with the acquisition of BevMo alcohol store chain to use as delivery centres and stores similar to Amazon’s fulfilment centres. Besides the Gopuff acquisition, the FTC is also investigating Uber’s acquisition of Drizly. Drizly is a liquor delivery service the company is loking to incorporate into the Uber Eats app.
For several years, uber has been focusing on pivoting into delivery with Cornershop and Postmates acquisitions in 2019 and 2020 respectively. The company’s core ride-sharing operations struggled during the pandemic and Uber has been keen on finding an alternative but the FTC is keen to get on the way.
FTC routinely looks at partnerships and acquisitions
It is important to note that there is nothing wrong with the FTC looking at a partnership or acquisition but it is vital to point that the company has a history with the regulator. For instance the company has issues with misleading information regarding the amount drivers could earn and has been fined before for mishandling access to driver and private user data.
Also the active stance of the new FTC commissioner Lina Khan regarding curbing monopolies could impact the company’s plans. Its implies that the rapid expansion by Uber to secure its operations for whatever happens to ride-sharing could be considered anti-competitive.
