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Uber Tries Expanding from Cars to Parcels

Aug. 22, 2014
Uber’s same-day delivery service is being tested in Washington, D.C.

Uber, the transportation app connecting riders to drivers, has started a pilot program allowing Uber users to order and receive staples like toothpaste, diapers and over 100 other items via the driver network. Uber Corner Store started this week for an experimental run in Washington, DC. If this trial run is successful, Uber will join Amazon, Ebay and Google in the same-day delivery market.

Uber is placing its success in clients’ hands. “The more you love it, the more likely it will last,” the Uber blog states. The company’s CEO Travis Kalanick told CNN Money last December, “We’re in the business of delivering cars in five minutes. And once you can deliver cars in five minutes, there’s a lot of things you can deliver in five minutes.”

The implications of this were discussed in MH&L’s recent Editorial Roundtable, to appear in its September issue. Participant Ron Giuntini, consultant and principal of Giuntini & Co., said he believes the Uber model will add tremendous value to the parcel delivery space.

“We have always talked about that last mile,” he said. “Think about 230 million vehicles in the United States, and the average vehicle is used about one hour a day. The drivers would be certified. It would be like a commodities market, where you would bid, and the parcels could be delivered, depending on the distance, at very reasonable prices.”

James Tompkins, CEO of Tompkins International, believes Uber has a good chance of changing the market long dominated by the parcel carriers.

“The impact will totally change traffic flows,” Tompkins said. “And the reality is, UPS and FedEx are in the wrong business because they are in the nationwide delivery of parcels. There is no nationwide delivery of parcel activity anymore because the 3PLs and the retailers and the consumer products companies, who are becoming retailers, all need to get local.”

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