Tuesday, June 16, 2015

Let's Get Ready To Rumble: Amazon Vs. Uber In the Delivery Wars

Y'all ready for this?
First up, the Wall Street Journal:

The $50 Billion Question: Can Uber Deliver?
Investors are counting on Uber to upend the delivery business much as it has for taxis, but progress has been slow so far
Uber Technologies Inc. became one of the world’s most valuable startups by creating a new way to transport millions of people in more than 300 cities. But using the same formula to upend the delivery business has turned into a slog.

For more than a year, the San Francisco company has been trying to build what its chief executive once called “an urban logistics fabric” that enables drivers who shuttle passengers with the tap of a smartphone to pick up food, grocery items and packages along the way. In a sign of Uber’s potential, it has more than 200,000 active drivers, roughly double the size of the delivery workforce at United Parcel Service Inc.

So far, though, an Uber same-day delivery program launched a year ago with plans to sign up dozens of retailers has announced partnerships with just six. And one of those, e-commerce company Gilt Groupe Inc., says its arrangement fell short of expectations, partly because Uber was unable to insure high-priced items sold through Gilt’s online store, according to a Gilt spokeswoman.

In recent months, Uber lost out on the opportunity to make deliveries in some cities for Apple Inc. and Starbucks Corp. , which discussed tie-ups with Uber but then made deals with startup courier servicePostmates Inc., according to people familiar with the discussions. Popular food-ordering apps Eat24, owned by Yelp Inc., and GrubHub Inc. also held talks with Uber but haven’t reached any agreements.

A food-delivery service called UberEats, launched last fall to speed lunch and dinner items from popular restaurants to Uber users in parts of New York City, Chicago, Los Angeles, Toronto and Barcelona, sometimes has so few customers that drivers have to throw away food at day’s end....MORE
Into this hot mess of a market steps...Amazon--again,WSJ:

Amazon Mulls Paying People for Deliveries
Move would help Web retailer manage the shopping experience, rising shipping costs
In its ceaseless quest to speed delivery, Amazon.com Inc. wants to turn the U.S. into a nation of couriers.
The Seattle retailer is developing a mobile application that would, in some cases, pay ordinary people, rather than carriers such as United Parcel Service Inc., to drop off packages en route to other destinations, according to people familiar with the matter.

As envisioned, Amazon would enlist brick-and-mortar retailers in urban areas to store the packages, likely renting space from them or paying a per-package fee, the people said. Amazon’s timing for the service, known internally as “On My Way,” couldn’t be learned, and it is possible the company won’t move ahead, the people said.

An Amazon spokeswoman declined to comment.

The service could give Amazon more control over the shopping experience and help contain shipping costs that grew 31% last year, faster than revenue. It also might give the retailer negotiating leverage with the largest carriers....MORE