Will Uber play a role in the retail industry of the future?
CEO Khosrowshahi recently announced the potential for his ride hailing company to branch out from food delivery to delivery from any local retailer. He envisions a delivery being made in under 30 minutes in busy metropolitan areas like New York.
Video Spotlight: Uber Eyes Retail Delivery
This post is based on the Reuters article, Uber may offer courier services for retail business – CEO Khosrowshahi, by Tina Bellon, December 4, 2019, and the YouTube video, Uber Eyes Retail Delivery, by PYMNTS Media, December 5, 2019. Image source: Ingram Publishing
1. How could Uber’s role in retail delivery affect other businesses strategies or ability to compete?
Guidance: At a time when bricks and mortar stores face both declining sales from online competition, and fast delivery options like Amazon Prime, Uber retail delivery could potentially breathe new life into fading retail chains. Rather than ordering online from Amazon and waiting a day or two for delivery, Uber retail could offer items in 30 minutes or less for those willing to pay for the convenience of speed and the ability to buy locally.
From a productivity standpoint, if a business needs supplies quickly, rather than dispatching an employee to go make a purchase, that employee could continue his normal duties while an Uber driver provides the pickup and delivery functions.
2. What other sustainability issues could arise from more Uber drivers on the road?
Guidance: Whereas a UPS delivery truck or other package services route their deliveries to minimize distance traveled and thus minimize fuel usage and environmental impact, Uber drivers typically work on a one-by-one delivery basis. Each Uber Eats order, for instance, constitutes a separate pickup and delivery trip.
This method of delivering retail packages could increase the amount of delivery traffic on the road and also result in greater fuel consumption and emissions for the same amount of delivered merchandise. However, whereas an Amazon shipment could be traveling a much greater distance to reach the customer, Uber could come from a local business which already utilized bulk delivery services to receive its inventory. Thus, the net impact is difficult to determine.