Will Coleman, Alto’s founder and CEO, said business was suddenly hurting, and badly, as “people were starting to heed the warnings here in Dallas.” Ride volume had fallen by about 75% within a matter of days.
Alto’s rideshare drivers aren’t the only ones who have found themselves becoming accidental delivery workers. As the coronavirus pandemic has forced people to travel less and slashed requests for rides, it has also boosted demand for home deliveries of groceries, meals and other goods. The abrupt shift in consumer behavior caused by the pandemic is upending the on-demand industry, where the biggest companies were built first and foremost around ride-hailing services rather than food deliveries.
For Alto, the shift meant the startup had to essentially “start from scratch again,” said Coleman. But the silver lining was that many of the selling points of its rideshare business, which employs its drivers and is focused on safety and cleanliness, were transferable to delivery during this unprecedented health crisis.
Moving to food delivery may help some companies weather the crisis, but it could come at a cost. Daniel Ives, an analyst with Wedbush, notes that Uber’s meal delivery business has been a “money-losing” venture that has weighed on the stock. Ives said the margins on delivery are lower than ride-hailing, as is how much the company takes on an order. “Ride sharing remains the bread and butter for Uber and Lyft with some dark days ahead as lockdowns remain around the world,” he said.
“My plan for the next few days is to try Uber Eats,” she said, adding that she applied to work for Instacart last week but has yet to start taking orders. She’s still nervous about “setting foot in a grocery store where there’s more people.”
