Costco expands ultra-fast delivery through DoorDash, Uber

Costco is broadening its same-day delivery network as it seeks to boost e-commerce sales and compete with giants like Walmart and Target. The retailer has partnered with DoorDash and Uber to enable customers to pick up online orders at U.S. stores and have them delivered directly to their doorstep. By leveraging gig drivers on these platforms, Costco can offer ultra-fast delivery to customers, utilizing a network of local drivers who select their own assignments.

DoorDash, primarily known for restaurant deliveries, now lets Costco members order groceries, household essentials, and other items from the retailer's marketplace and receive fast delivery using the DoorDash app. This partnership extends Costco's existing collaboration in Australia, New Zealand, Sweden, Iceland, and Puerto Rico to the U.S. market.

Meanwhile, Uber announced it will expand its partnership with Costco to deliver products in 47 states, up from 17 states, making nearly 600 Costco locations available on the Uber Eats app. This allows shoppers to arrange on-demand and scheduled delivery, with nearly all Costco locations accessible through the app in Canada, Mexico, Japan, Taiwan, France, and Spain.

Costco CEO Dominick Miserandino highlighted that by partnering with delivery platforms, Costco avoids the costs associated with running its own delivery network while keeping its core revenue stream intact. DoorDash has also begun providing on-demand delivery for Skims, a brand that sells undergarments, loungewear, and everyday clothing, with delivery expected to take less than an hour.

As the retail delivery market continues to evolve, online sales now constitute 16.5% of total retail sales and are growing at about 10% annually. Alternative carriers, like DoorDash and Uber, now make up about 8.5% of the parcel freight market, up from just 2.6% in 2021.