Executive Briefings

Is Uber Driving Toward Head of the Line in Logistics Business?

Uber's mission is to offer "transportation as reliable as running water, everywhere for everyone". And perhaps "everything": it has begun experimenting with local delivery services, with the aim of becoming as disruptive in logistics as it has been in the taxi business.

Last month Toronto became the fifth city where the firm's lunch-delivery service, UberEATS, is available. It is also running in Chicago, Los Angeles, New York and Barcelona. New Yorkers can call up a cycle-courier service on their Uber apps; and in Washington, DC, they can use it to order household supplies for rapid delivery. The company is reported to be in talks to set up same-day delivery for various retailers in America, from Hugo Boss to Cohen's Fashion Optical.

In some cities there are already a number of smaller firms that offer rapid dispatch via an app: for instance, Instacart delivers groceries, Postmates brings hot meals and Shyp collects parcels. None has anything like the scale and reach of Uber, and thus all must fear it eating their lunch. "FedEx and Hertz combined", is how Max Levchin, a founder of PayPal and an investor in Uber, describes the future of the firm, referring to two giants of logistics and car rentals, respectively.

It seems unlikely that even in the long term Uber would want to go into long-haul shipping, but there is huge scope for consolidating the fragmented and inefficient business of making deliveries in large conurbations. Postal services and logistics firms could outsource their last-mile deliveries to Uber. But privately at least, they must also fear losing business to it.

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Last month Toronto became the fifth city where the firm's lunch-delivery service, UberEATS, is available. It is also running in Chicago, Los Angeles, New York and Barcelona. New Yorkers can call up a cycle-courier service on their Uber apps; and in Washington, DC, they can use it to order household supplies for rapid delivery. The company is reported to be in talks to set up same-day delivery for various retailers in America, from Hugo Boss to Cohen's Fashion Optical.

In some cities there are already a number of smaller firms that offer rapid dispatch via an app: for instance, Instacart delivers groceries, Postmates brings hot meals and Shyp collects parcels. None has anything like the scale and reach of Uber, and thus all must fear it eating their lunch. "FedEx and Hertz combined", is how Max Levchin, a founder of PayPal and an investor in Uber, describes the future of the firm, referring to two giants of logistics and car rentals, respectively.

It seems unlikely that even in the long term Uber would want to go into long-haul shipping, but there is huge scope for consolidating the fragmented and inefficient business of making deliveries in large conurbations. Postal services and logistics firms could outsource their last-mile deliveries to Uber. But privately at least, they must also fear losing business to it.

Read Full Article