Uber drivers in convenience store shake-up
Mar 13, 2019
The founders of an in-car mini-vending machine being increasingly used by Uber drivers to sell chocolate bars, chewing gum, drinks and condoms to passengers aim to shake up the convenience store retail market.
Grabox is already being used by 300 ride-sharing drivers from companies including Uber, Ola, Didi and Taxify, and co-founder Dhruv Kohli said on Wednesday that by the end of March there would be more than 550 in operation.
The slim-line box is strapped to the centre console of the vehicle and all of the transactions are cashless, with drivers taking a 20 per cent cut of the sales.
“There is no cost to the driver,” Mr Kohli said.
Grabox initially concentrated on the Sydney market but has been expanding nationally and now operates in six states. The in-car vending machine business model is well established in the United States, where a company called Cargo has its small boxes being used by more than 20,000 Uber drivers.
“Ultimately, we want to have many more stores than 7-Eleven,” Mr Kohli said. There are about 680 7-Eleven stores in Australia, in a market of almost 8000 convenience stores.
Mr Kohli who is chief operations officer, said the idea for Grabox stemmed from the free mints and water many Uber drivers gave out to passengers, partly to push up their driver ratings as they went a step further than providing a smooth and pleasant ride.
Grabox has signed supply agreements with brands including Coca-Cola, Mars Wrigley and Hero Condoms.
The firm’s basic offering has 11 products including snacks, lollies and tampons.
Mr Kohli said Grabox initially had targeted ride-sharing drivers because they were perceived to be more tech-savvy. “They are tech-oriented people,” he said. But there had also been expressions of interest from taxi drivers, who were attuned to the extra service they could offer passengers while also making extra money.
Ride-sharing services are engaged in a huge battle with traditional taxi companies in Australia for passengers, with taxi operators such as ASX-listed A2B Ltd (formerly Cabcharge) convinced that surge pricing at bust times by ride-sharing services is a big turn-off.
In the first few weeks of operation with Grabox, new drivers were sent a basic, 11-product vending-machine box, but could then customise the offerings for repeat orders depending on the biggest sellers in their catchment areas, Mr Kohli said.
“Then we take the driver’s feedback,” he said. The biggest sellers so far were bags of M&Ms and Skittles.
The ride-sharing market had a large amount of upside, he said. Uber had about 62,000 active drivers on its books in Australia, while other ride-sharing companies had tens of thousands more drivers.
The Grabox business model revolved around drivers making between $100 and $200 in extra revenue a month. Mr Kohli said the box also helped to lift driver ratings for ride-sharing vehicle operators who wanted to step up their level of service.
He said air-conditioning in vehicles was enough to keep the snacks at a satisfactory temperature, and the regular turnover of stock would ensure use-by dates were not an issue.