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According to a company report issued Thursday, Uber upgrades its experimental delivery service into full business. UberRUSH was first rolled out in 2014 in New York, but now the taxi app firm expanded it to two more cities: San Francisco and Chicago.
Furthermore, the service is now eyeing local business and as usually works on a low-margin. For a fee of about $5 to $7, Uber couriers and drivers can deliver any type of small packages across the three cities.
Although Uber grew into a multibillion dollar business, it is now interested in smaller opportunities. While low-cost on-demand delivery services are a growing business, too many players are joining in from Postmates and Sidecar to Amazon Flex and Deliv.
Rumors have it that Google and Amazon are currently working on a drone infrastructure to deliver packages to their clients across U.S. cities.
When UberRUSH was first announced last year it was advertised as a service designed to help individual customers get their packages from point A to point B in a quick and cheap fashion. For instance, Airbnb hosts could use a courier to send keys to their guests across city or lawyers could send legal papers to their customers to be signed.
But soon Uber learned that individual customers do not usually send a lot of stuff to their peers. This is why, Uber tries to lure local retailers, restaurants, and small businesses.
But market analysts wonder why the taxi-app firm entered on-demand delivery business in the first place since delivery based on messengers that get stuff ferried across cities on their bikes is not considered very lucrative. Plus there is plenty of competition, while in some areas such as food delivery there are firms that have a loyal customer base.
Furthermore, drivers and couriers get 70 percent to 80 percent of the delivery fee which leaves Uber with about 25 percent of a $5 pizza and a lot of headaches from the planet’s largest tech companies. Yet, Uber has a potential to grow and its ambitions are not small.
It managed to be successful in the taxi app business despite tight regulations and control. Initially, Uber offered only black cars, but in time it diversified its offerings so that low-rides could be done in some guy’s Prius under UberX. Then UberPool emerged with ever lower fees, and now it is the company’s most lucrative service.
And to have a clue about how large Uber’s ambitions are, its founder Travis Kalanick recently said that he plans to turn every car of the world into an Uber.
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