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Exclusive: Walmart, Google-backed Deliv end online grocery partnership

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Exclusive: Walmart, Google-backed Deliv end online grocery partnership

(Reuters) – Walmart Inc and logistics firm Deliv pulled the plug on a key same-day grocery delivery partnership, dealing a setback in the retailer’s race against rival Amazon.com Inc to deliver groceries to customers’ homes.

FILE PHOTO: Walmart’s logo is seen outside one of the stores in Chicago, Illinois, U.S., November 20, 2018. REUTERS/Kamil Krzaczynski/File Photo

The world’s largest retailer began bolstering its partnerships with third-party courier firms to reach consumers in 100 U.S. cities last year, after failing to use Uber and Lyft to deliver groceries, and struggling in its attempt to use its own employees to deliver goods.

Deliv, which was one of Walmart’s earliest partners with pilot programs in Miami and San Jose, served the retailer with a 90-day termination notice, and the two companies stopped working with each other in late January, according to two people familiar with the situation.

Walmart confirmed the previously unreported decision, and said it still partners with seven delivery firms, including DoorDash and Postmates, four of which it signed up in January.

People familiar with the Walmart partnership with Deliv said the Deliv drivers had to frequently wait 40 minutes or more to collect grocery orders when they showed up at the store. One reason for that, they said, is because Walmart gives a priority to customers over delivery drivers during regular hours, which complicated the partnership.

The store operations at Walmart “were a huge problem,” said one of the people with direct knowledge of the matter, adding the retailer could not “process online grocery orders fast enough.”

Deliv declined to comment. Walmart spokeswoman Molly Blakeman told Reuters the retailer and Deliv mutually decided to end the partnership. “As with any pilot, the intent is to learn. And we ultimately came to the conclusion with Deliv that while their platform is a good delivery option, it was not the best fit for our program at this time.”

Blakeman said same-day grocery delivery is currently available in 800 of its more than 5,000 U.S. stores and warehouse clubs, and the retailer plans to add 800 more this year.

Deliv offers scheduled same-day deliveries through gig drivers, a model which can work well with faster order processing and a better ability to predict demand and robust volumes. Walmart is now working mostly with restaurant delivery firms that deliver an order as and when it is generated, one of the sources said.

Both sources said order volumes were low in many markets, and one source said orders had to be delivered over large distances, resulting in both Deliv and Walmart losing money.

“When the partnership with Deliv was struck, the hope was that demand will be stronger than it is now,” one of the sources said.

Deliv operates in 1,400 U.S. cities, tapping into networks of local freelance drivers to deliver packages same-day for a fee for a range of retailers, from Home Depot Inc to Kohl’s Corp.

In October, it raised $40 million in a new round of financing from investors, including Alphabet Inc’s Google and United Parcel Service. In December, it signed up 20 new U.S. retailers including Nike Inc and Nordstrom.

Deliv can process and deliver thousands of orders in an hour. Walmart in San Jose was sometimes generating only a hundred orders a week, and there were problems processing that volume through stores, one of the sources said. Walmart is working to fix the problems at its stores to process orders faster, the source added.

Blakeman said there were no problems with order volume in the market.

The sources also told Reuters that Walmart has ended a separate grocery delivery test from 2017, in which it partnered with smart security company August Home and Deliv for keyless entries to shoppers homes, to deliver groceries directly to their refrigerator.

Reporting by Nandita Bose in Washington; Editing by Vanessa O’Connell and Edward Tobin

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GM’s Arīv electric bikes are launching in Europe first

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Even though the company designed and engineered the bikes in Michigan and Oshawa, Ontario, it will release them in Germany, Belgium and the Netherlands first. GM says it chose those locations “due to the popularity of lithium-ion battery-powered e-bikes in those markets,” which makes sense if you think about it.

The compact e-bike called Arīv Meld will set customers back between €2,750 and €2,800 (approximately $3,200). Meanwhile, the folding e-bike called Arīv Merge, which users can fold up and roll on two wheels if they want to, will set buyers back between €3,350 and €3,400 (around $3,900). Both models are now available for pre-order on Bike Exchange and will start shipping in the second quarter of 2019.

Ariv

Arīv Meld

ArīvArīv Merge

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EU’s Vestager says not precluding Facebook case in future

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EU's Vestager says not precluding Facebook case in future

FILE PHOTO: The entrance sign to Facebook headquarters is seen in Menlo Park, California, on Wednesday, October 10, 2018. REUTERS/Elijah Nouvelage/File Photo

BRUSSELS (Reuters) – Facebook is not currently in EU regulators’ crosshairs but it may well be in future because of the crucial role played by data, Europe’s antitrust chief said on Tuesday.

European Competition Commissioner Margrethe Vestager’s comments came two weeks after the German cartel office ruled that the world’s largest social network abused its market dominance to gather information about users without their consent.

Vestager said she has no case against Facebook regarding its market power for now but nevertheless was monitoring the market.

“We have some concerns. One thing is that we don’t have an open case now, that doesn’t preclude we don’t have a case in future. We are looking at the market very closely,” she told a European Parliament hearing.

The European Commission has previously indicated that Facebook’s issues could be better handled by privacy enforcers rather than by competition regulators.

Vestager has taken on tech giants including Google and Qualcomm in recent years and handed down million-euro fines for abusing their market power.

Reporting by Foo Yun Chee; editing by David Evans

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LendingClub forecasts bigger-than-expected first-quarter loss

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LendingClub forecasts bigger-than-expected first-quarter loss

(Reuters) – Online lender LendingClub Corp forecast a bigger-than-expected first-quarter loss on Tuesday, and revenue that missed Wall Street estimates, sending its shares down 5 percent in after-market trading.

FILE PHOTO: A Lending Club banner hangs on the facade of the the New York Stock Exchange in New York, New York, United States December 11, 2014. REUTERS/Brendan McDermid/File Photo

For the first quarter, the company expects net revenue between $162 million and $172 million, below analysts’ estimates of $181.2 million, according to IBES data from Refinitiv.

LendingClub also forecast a first-quarter loss between $20 million and $15 million, compared to Wall Street estimates of a loss of $5.14 million.

For the full-year 2019, LendingClub forecast a loss that was bigger than Wall Street estimates. However, the company said it was targeting profitability on an adjusted basis in the second half of the year.

LendingClub CEO Scott Sanborn said in an interview that the lower-than-expected guidance was due in part to seasonal weakness in the first quarter and economic uncertainty both in the United States and overseas.

“There is a lot of uncertainty both globally and domestically,” Sanborn said.

He added that the company would focus on achieving profitability in the second half of the year by cutting costs through initiatives such as outsourcing some business processes.

The company plans to transition its loan servicing platform, to an off-the-shelf solution operated by a third party, Sanborn said. This would allow LendingClub to redeploy engineers to more “value-add” activities, Sanborn said.

LendingClub is one of the largest companies that operates an online platform that connects consumers looking for loans with individuals or institutional investors such as banks.

The San Francisco-based lender has been working to boost investor confidence since May 2016 when an internal investigation into loan malpractices led to the ouster of then-CEO and founder Renaud Laplanche.

Like other online lenders, it has also faced concerns from investors who fear companies in the nascent sector may struggle to grow fast while keeping the quality of their loans in check.

Excluding items, the company posted a smaller loss in the reported quarter on the back of higher loan originations which rose 18 percent to $2.87 billion.

LendingClub’s overall revenue rose 16 percent to $181.5 million.

The San Francisco-based company posted an adjusted loss of $4.1 million, or 1 cent per share, in the fourth quarter ended Dec. 31, compared to a loss of $7.3 million, or 2 cents per share, a year earlier. (reut.rs/2EiMdjC)

Reporting by Anna Irrera in New York and Bharath Manjesh in Bengaluru; Editing by Shounak Dasgupta and Susan Thomas

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