Arrival, the U.K.-based electric bus and van manufacturer, has announced a deal with global ridesharing giant Uber to develop an electric car for ride hailing in the U.K. and Europe.

Uber has a similar deal with General Motors (NYSE: GM) in the U.S., first announced in September 2020. The new deal with Arrival for a purpose-built electric vehicle for ride-hailing calls for the car to enter production Q3 2023.

Uber (NYSE: UBER) also announced an agreement with Gopuff in the U.S. to provide on-demand delivery to more than 650 cities of everyday essential items from Gopuff’s national fulfillment centers.

The Arrival deal marks the first time the electric vehicle startup will venture into automobiles, having focused on delivery vans and buses to this point.

“As our cities open up we have an opportunity to make sure that urban transport is cleaner than ever before,” Jamie Heywood, Uber’s regional general manager for northern and eastern Europe, said in a statement. “Uber is committed to helping every driver in London upgrade to an EV by 2025 and thanks to our Clean Air Plan more than [$187 million] has been raised to support this ambition. Our focus is now on encouraging drivers to use this money to help them upgrade to an electric vehicle, and our partnership with Arrival will help us achieve this goal.”

The Arrival Car (NASDAQ: ARVL) will prioritize driver comfort and safety, the company said, noting that a typical ride-hailing vehicle travels 27,000 to 31,000 miles per year. Arrival will collaborate with Uber drivers to ensure the design of the vehicle meets the needs of rideshare drivers. The car’s design is expected to be revealed before the end of this year.

“We are confident that electrifying ride-hailing vehicles will have an outsized impact on cities, and we are keen to support drivers as they manage this transition,” Tom Elvidge, senior vice president of Arrival Mobility UK, said in a statement. “Arrival Car will be designed around drivers’ needs to create a vehicle that is affordable, durable and desirable. We have a great partnership with UPS to create a best-in-class electric delivery vehicle, and we hope to replicate that success with Uber as we develop the best possible product for ride hailing that elevates the experience of the passenger and improves drivers’ health, safety and finances.”

Uber announced in March it would allow customers in London to choose an electric vehicle for their rides at no additional cost.

Arrival, which went public at the end of March in a merger with special purpose acquisition company (SPAC) CIIIG Merger Corp., has been building microfactories to accelerate deployment of electric vans and buses and has an order for 10,000 vehicles from UPS (NYSE: UPS). The bulk of those vans are expected to be built in a North Carolina factory. A separate South Carolina facility will produce buses. It has not said where it would build the cars for Uber.


Read: Cowen: Arrival’s unique approach sets up opportunity in EV space

Read: UK electric vehicle startup Arrival picks N.C. for North American base

Research firm Cowen has been impressed with Arrival’s manufacturing approach. In initiating coverage of the company in early April, Cowen said its microfactory approach was unique and would allow it to scale quickly.

“We are constructive on Arrival’s unique approach to electric vehicle production leveraging microfactories and vertical integration. The company’s technology and strong value proposition for short-haul commercial operators warrants a premium to other less vertically integrated competitors,” the Cowen report said.

Cowen placed an outperform rating on the company and set a price target of $28.50 per share. Shares of Arrival were up 3.5% in morning trading Tuesday  to $17.98 a share.

Uber’s deal with Gopuff

Gopuff provides household essentials such as cleaning and home products, beauty, baby and pet products, food and drinks, quick meals and alcohol in some markets. With more than 250 microfulfillment centers across the U.S., the company is able to deliver goods 24 hours a day in many markets for a flat $1.95 delivery charge.

“As we continue to innovate and lead the instant needs space, we’re excited to power Uber’s new essentials offering, leveraging our logistics, tech and inventory expertise to bring a first of its kind experience to customers,” said Daniel Folkman, Gopuff senior vice president of business. “Everything we do at Gopuff is for our customers and this partnership brings Gopuff’s unique assortment, affordable prices and fast delivery to even more people nationwide.”

Uber customers will be able to order Gopuff products through the Uber app.

“One thing we know to be true is that people have come to expect more delivered to their doorsteps than ever before — we’ve seen searches for grocery and convenience items grow by 40% since the start of the year,” said Raj Beri, Uber’s head of grocery and new verticals delivery. “With this partnership, we are able to leapfrog the competition in using Gopuff’s network of microfulfillment centers to instantly meet consumer demand for thousands of products — and I’m incredibly excited about the opportunities ahead.”

Uber said customers with Uber Pass or Eats Pass memberships will not be charged on deliveries for orders over $15.

Click for more Modern Shipper articles by Brian Straight.

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