But Uber entering the delivery battle could be good for these smaller companies too. Amazon is famous for using its enormous power to bully smaller companies into accepting less favourable terms (just as it’s done with the publishing industry), and if Uber provided a viable alternative option, Amazon would be forced to work harder to win the business of its Marketplace sellers. That could mean a bigger share of the cash or less draconian supplier agreements.
Uber-intelligent
The other really interesting aspect of this is in terms of how much more efficient Uber could make deliveries. One of the principles that underlies Uber is that it wants its vehicles to be constantly working. If a car is moving either a person or a package from A to B, it is earning the company money, and downtime between trips is wasted capacity. This is why the company has been experimenting with services such as UberPool, in which drivers will pick up multiple people taking roughly the same journey, and UberHop in which vehicles will travel on certain routes more like a traditional bus service.
To make it happen, Uber spends a lot of time crunching data and improving its algorithms to ensure that, when its app spits out directions telling drivers where to go, they are taking the best possible route. While Uber is very secretive on exactly how it does this, it is obvious to speculate that this means taking into account real-time traffic conditions, and historic ride data, along with other data sources to figure out optimal routes.
With this level of ruthless efficiency, the cost of deliveries more generally could be driven down – making it better for consumers and small businesses. And maybe even the environment too, if the efficiencies can be channelled into requiring less vehicles on the road. It could also mean better service. Just as Amazon Prime Now, the company’s one-hour delivery service, shows you in real time where your parcel is, Uber already has this technology built into its app and it’s intelligent. This in itself could put an end to waiting in all day for a “7am-9pm” delivery window from other couriers.
Small beginnings
“Uber could potentially become a critical part of the shopping experience – and soon.”
Obviously, I’m getting ahead of myself a little, but challenging Amazon really does seem like a natural next step – especially if Uber is serious about getting into deliveries. Despite lacking any inventory whatsoever, Uber could potentially become a critical part of the shopping experience – and soon.
At the moment, UberRUSH is only available in New York, Chicago and San Francisco, but it is easy to see how the company could expand it. In cities all around the world, there are already thousands of drivers capable of delivering physical goods as well as humans, and there are already millions of people with the app on their smartphones who would make it happen overnight.
Perhaps Amazon should hurry up and ready its army of drones – after all, Uber’s fleet of humans is already good to go.
Wondering how Amazon plans to fill the skies with delivery drones? Then click here for the lowdown on Amazon’s airborne delivery division.
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