Uber launches grocery delivery in Montreal, Toronto

Uber is getting into the grocery delivery business and is using some Canadian cities to help it launch the venture.

The San Francisco-based tech giant said Tuesday that users in Montreal and Toronto could now order groceries through its Uber and Uber Eats apps.

"They'll be able to place orders from local merchants and receive them in as little as one to two hours," Daniel Danker, who runs Uber's product team, told reporters.

A demonstration of the new service showed thousands of items available from retailers including Walmart, Metro, Rexall, Costco, Longo's, Pet Valu and Well.ca.

The company's foray into the grocery sector comes after Uber advertised in late 2018 that it was hiring a head of grocery product in Toronto.

The company remained secretive about the role, but a year later, Uber's potential interest in a grocery service was a hot topic again when it announced it was acquiring a majority stake in Chilean grocery delivery start-up Cornershop.

The deal was held up by a Mexican Competition Authority investigation, but is supposed to close in the coming days.

Cornershop will serve as Uber's partner in the grocery delivery venture, which will launch in more than a dozen Latin American cities alongside the Canadian markets.

Uber faces stiff competition with its new service. Amazon.com and Instacart are already going head-to-head with supermarket brands such as Walmart and Loblaws.

Uber believes it can edge out some of the competition because it sees groceries as a natural extension of its booming food delivery service and a way for the company to become a one-stop shop for every meal.

Grocery delivery has only become more important during the COVID-19 pandemic because more Canadians have transitioned to work from home and Uber's ride-hailing business is still in "recovery mode," according to Danker.

"I think this would have made a lot of sense in a pre-COVID world, but our world has just fundamentally changed and so this represents even more of a huge responsibility for us" Danker said.