Uber’s expansion into the delivery market has begun, with the announcement that Uber Rush has ended the pilot stage and will be available to all businesses.
Launched in 2014, Uber Rush allowed customers to order a courier in the same way they order a cab, on the app. The courier is told where to go, what to carry, and where to deliver — the charge is complete through the app.
Over time, Uber realised that this courier system would be highly useful for small businesses. When a takeaway service is short of drivers, it can order in a few couriers to deliver meals to customers. On Valentine’s Day, a flower shop can stock up on Uber drivers.
Uber has been partnering with a few brands across the U.S. over the last six months, competing with FedEx, UPS, and other courier services. Instead of working for one business, Uber can pick up multiple packages from multiple businesses at one time, which should make the service more efficient for small businesses.
Businesses use the merchant portal to order and pay the couriers. Uber pays the driver between 75 and 80 percent of the cost for delivery, and takes the rest. The average delivery will cost between $5 and $7, according to Uber.
This is all similar to another startup Postmates, but instead of integrating the menu into the app, Uber will work in the background. This means any business can order a courier, opening up opportunities and “one off” orders for Uber, instead of having to partner with the company for the long term.
Uber Rush begins in San Francisco, New York, and Chicago. In San Francisco, couriers will deliver on bikes or cars, in Chicago couriers will only use cars, and in New York couriers will use bikes or walk. For now, a courier cannot also be a cab driver. In the future, we might see the two systems come together, allowing a driver to choose what he wants to deliver: people, presents, or food.
Uber has already shown it is willing to invest heavily to win a market. Against established companies like UPS and FedEx, it might need to lower delivery prices to win business. At least for couriers, Uber does not appear to be breaking any laws in New York, San Francisco, or Chicago, though we’re sure some lawsuits will come once Uber establishes market share.
Uber did not disclose where the courier service will be available next. London, Paris, and Shenzhen are three of the most popular cities outside of the United States, so we would suspect trials might start in those cities shortly.