Dive Brief:
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A long-rumored effort by Uber to expand its retail delivery services through major brands is to be formally announced this month or next, sources have told Re/Code.
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The deals involve big-name retailers and the launch will begin in New York City and San Francisco, according to the report.
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Uber is also interesting in finding ways, though software like Shopify or Bigcommerce, to offer delivery services to smaller retailers.
Dive Insight:
Package delivery seems like a slam-dunk for Uber, which has spread across the globe by disrupting traditional taxi services. But so far its delivery services pale compared to its global ride-hailing service.
This could be because, in addition to a few long-term delivery services, dozens of startups have spring up to offer restaurant, grocery, and retail deliveries — including Amazon.
It could also be that Uber is finding that moving packages is a more complicated logistical enterprise than moving people.
“I think that Uber believes that their hand-held app is the answer, but I believe it’s not,” Rob Howard, CEO of Grand Junction Inc., a business-to-business delivery platform that connects large retailers throughout the U.S. and Canada with local, established delivery services for retail same-day, has told Retail Dive. “It’s way more complex than that. It’s a long row to hoe, to match up the delivery and the supply, and it’s so far away from passenger delivery.”
Uber is also increasingly battling questions in several countries, including the U.S., about how its drivers are hired and paid, which could add to its costs and complicate its logistics further. The company is being challenged by regulators, and could face difficulties finding qualified drivers if the employment rate in the U.S. continues to improve.
