The same-day and on-demand delivery market in the UK is an openly admitted target for taxi app company Uber. It’s an attractive prospect as the UK courier and express sector generates annual revenue of around £7.1bn (US$10.2bn). In terms of value, the same-day delivery market expanded by an estimated 5% year on year from 2009 to 2013, marking an overall increase of 19%.
Until now, the UK’s local same-day and express courier market has been relatively unscathed by the new crowdshare technology that has engulfed the taxi industry – 500 black cabs disappeared from London streets in 2015 as Uber elbowed its way in.
Now Uber has utilized its network of drivers to deliver things as well as people. Its UberRUSH courier service has already taken off in the USA in three major cities, with more to follow. And a number of UK cities, such as London, look equally ideal for the UberRUSH model to storm. Uber London makes no secret of its ambitions in the capital.
Stephanie Desmond, marketing manager for Uber London, said, “Los Angeles and New York are great examples of cities where Uber is pushing the boundaries with courier service UberRUSH and food-delivery service Uber Fresh [now UberEATS], which I am really keen to replicate here.”
So how can existing couriers hope to compete? It’s estimated there are over 4,500 courier companies operating in the UK, ranging from one man and his bike operations to international companies offering courier pick-ups amongst their range of services. While some of the big players have been publicly dismissive of UberRUSH, smaller companies are more alarmed and are preparing for Uber to take their lunch.
Booking a traditional courier involves booking online or by phone, often a time consuming process, and a rather fraught one for the many consumers who only use such a service once or twice a year. As a rule, the smaller the company the more clunky and less intuitive its site. Compare this experience to simply inputting a few details in the Uber app on customers’ mobiles – and having one of the may Uber drivers arrive within minutes – and the challenge seems a daunting one.
And it’s not only old-school man and van operators who face a significant challenge. In the USA, rideshare company Sidecar launched a well funded same-day service for local businesses whereby goods, food and flowers were delivered to local consumers using its existing pool of drivers. It spread to a number of cities and looked like becoming a success. But at the end 2015, both deliveries and passenger rides were abruptly axed; even such a modern entrepreneurial company couldn’t compete with the scale of Uber.
So what can existing couriers do to compete with the Uberfication of the courier market? Here’s five ways to withstand the competition:
Network: Those smaller companies that have not developed shared networks with other operators leave themselves vulnerable to competition. Sharing networks gives the ability to offer services over greater distances and offer far greater flexibility.
Become a digital native: Don’t rely on clunky, embarrassingly amateur-looking websites – embrace technology. By keeping the number of steps in the booking process to a minimum, and offering technologies such as live tracking to keep customers fully informed, express and same-day couriers can ensure their customers experience a similar level of service and information to UberRUSH customers.
Go niche: By specializing in particular markets – such as medical supplies, art shipments or aviation parts – couriers can build up a specialist service. Using tailored packaging and job-specific vehicles creates a service that cannot be emulated by an Uber driver in a Japanese four-door sedan.
Love your customers: The very nature of the Uber app means the first available driver will be the one coming to a business’s doors. Even though Uber drivers are star rated, they will not know a particular company or its exact needs. By offering friendly, regular and trouble-free service, keeping in close contact with your customer base, and going the extra mile, couriers can ensure that they keep their regular business clients from straying.
Offer something more: In the USA web based courier Shyp has the advantage of offering the ability to pick up and then package items through its couriers, which it calls ‘Heroes’; something Uber drivers are unlikely to have time to offer. Can you imagine trying to package, say, a guitar, in the back of a Toyota Prius? This service works remarkably well for eBay traders and has proved popular.
So there is no need for existing couriers to feel overwhelmed. However, companies of all sizes must look to reshape their business the best way possible to compete with the arrival of UberRUSH, before it arrives in the UK.
Read ParcelHero’s The Uberfication of Deliveries report here.
David Jinks is head of consumer research and public relations at the international courier ParcelHero. He is an award-winning journalist and blogger who specializes in logistics and transport. David was formerly publisher at The Chartered Institute of Logistics & Transport, where he ran the institute’s journals, news bulletins and international newsletter. David was previously a newspaper reporter and has edited magazines on classic cars, railways and commercial vehicles.