Part of Uber’s massive $50 billion (£32 billion) valuation is the future plans to expand the business, moving into delivery services for merchants, food and consumer goods.
The push into the delivery market was more of a surge, with a large number of merchants partnering with Uber’s massive 200,000 strong taxi driver network, capable of delivering a large amount of goods on the same day.
Even with this large network, it has run into some problems. Some merchants are reporting slow speeds of delivery due to a lack of drivers willing or able to deliver consumer goods or food to customer’s doorstep. There has also been issues with the pricing limits and insurance arrangements between Uber and merchants, leading both Apple and Starbucks to back out of plans with the mobile taxi giant.
Having a huge network will make Uber a much more powerful rival compared to what UPS, FedEx and DHL have had to deal with in the past, but for now the management issues surrounding Uber’s delivery service seem to be costing the company large contracts.
Uber might also be able to promote the idea that takeaway and consumer goods companies can lower prices on delivery, if they use Uber’s network. Plenty of takeaways hire their own drivers, meaning each one has to be paid a part time wage, whereas with Uber it will only need to pay for what is delivered.
It cuts most of the time spent waiting around, meaning businesses with low demand for delivery can cut their drivers and potentially save thousands.
Uber is branching out its network in the US, Europe and Asia to make sure it can handle extra deliveries. In Hong Kong, it offers cargo shipments for business-to-business clients, while in Barcelona it is offering food and grocery delivery to the customer’s doorstep.