The wind seemed to be at Uber’s back when it launched UberRUSH. Uber had turned the taxi industry on its head and many observers foresaw it doing the same thing for parcel delivery. So what went wrong?
Uber gave no official reason for closing UberRUSH, but the fact that it never extended beyond its initial three cities suggests that RUSH wasn’t the slam-dunk success that some analysts thought it would be.
There’s currently a battle for drivers in the crowdsourced delivery world. If a platform isn’t offering enough work at the right rates, then couriers will work for other platforms.
Feedback from some drivers suggests that UberRUSH’s rates weren’t attractive enough in comparison with the passenger service. In addition to this, collecting and delivering a parcel is usually more work as, instead of sitting in your car and waiting for the passenger, you need to park, find the exact place where the parcel is to be collected, hope it is ready, collect it, drive to the consignee address, park, find the exact address and addressee, ensure he confirms receipt, and so on. The two most potentially troublesome elements are parking legally without risking a fine and finding the right address, especially when the mapping system is wrong or the actual entrance is counterintuitive.
It was proposed that Uber drivers could transport parcels while they ferried passengers, sharing costs. The reality is that people are probably easier to deal with and the complexity of parcel delivery didn’t warrant the additional income for many drivers.
Is last-mile delivery as vulnerable to disruption as the taxi sector?
There’s huge ongoing investment in delivery such as route optimization, delivery prediction, and handheld technology. Nevertheless, if implemented correctly and with the right partners, UberRUSH could have disrupted the last mile in a big way.
Had Uber teamed up with a company such as eBay – the ‘sleeping giant’ of the Last Mile – they could have offered super-fast Amazon Prime Now-type delivery via locally available stock – but without the costly infrastructure that traditional delivery networks need.
As Uber prepares for an initial public offering, management is dropping underperforming parts of the business. This is where UberRUSH has ended up, despite having had the potential to be a star performer.
Is same-day delivery not that big a deal for B2C?
Amazon created the ‘need’ for same-day delivery as part of its drive for differentiation and top-level customer experience. The problem is that Amazon almost certainly contributes to the cost of running the service as customers just wouldn’t want to foot the true bill, and a major partner like Ebay or Walmart may contribute too.
Perhaps the other true opportunity for UberRUSH was to become the flexible delivery force for mainstream delivery companies, offering extra capacity at peak times, for evening and weekend delivery, or to cover for driver absences.
Unlike Amazon, which spent some time developing its crowdsourced Amazon Flex delivery solution and had some industry players on their team – including Marek Ròżycki, managing partner at Last Mile Experts – Uber didn’t seem to have invested in enough industry expertise or planning. Perhaps it was just too excited by its previous Midas touch.
On the execution side, the product was not attractive enough for the passenger drivers and less so for any dedicated parcel couriers.
Did it have to be this way?
Actually, no. UberRUSH could have been a real disruptor, but only in tandem with having the right management team, strategy and partners behind it. Let’s see how things develop, but it still isn’t too late to reincarnate this project. We will be watching this space!