Will Uber shake up the courier industry?
The company that transformed the taxi industry is now deploying bike messengers. Could it spell trouble for independent messenger firms?
Like riding with Uber? Now your takeout can join the fun, too.
Starting Wednesday, the transportation company has officially launched "UberRUSH," which lets clients summon bike messengers to transport belongings and merchandise within New York City, Chicago, and San Francisco.
The new feature is intended mostly for business owners, including restaurants that wish to deliver food. Merchants and customers can track their deliveries in real-time in the app or online.
"Businesses that tap into UberRUSH will make getting anything in your city faster, more reliable, and more affordable than picking it up yourself. It’s time to save business owners the headache, save you the trip, and save us all a bit more time," posted Jason Droege, head of UberEVERYTHING, the division in charge of UberRUSH and food service UberEATS, on the company’s website.
The service has no upfront cost, reports Business Insider’s Biz Carson, but each delivery may cost between five and seven dollars, of which the messenger will keep about 75 percent of the fee. Ms. Carson notes that UberRUSH could threaten FedEx and UPS, but what about bike messengers?
The US courier industry is worth $14.5 billion, according to industry reports, spread across more than 7,000 firms with an average of 25 messengers each.
When BGR's Zack Epstein tried UberRUSH, he reported that it "doesn’t just kill traditional courier services for non-sensitive deliveries, it heartlessly murders them in the most gruesome way imaginable."
Will Uber decimate these small businesses? The company is a long way from dominating the messenger scene, but its meteoric rise in the taxi industry should have couriers worried. If the technology, convenience, and pricing appeal to clients, Uber may find itself poaching messengers from more established firms.
While Uber has become nearly ubiquitous in cities, its growth is not without controversy. The company has entered new markets while dodging taxi regulations, sometimes illegally, and earned criticism from traditional taxi drivers who feel their new competition isn’t playing by the rules.
And as The Christian Science Monitor's Max Lewontin reported last month, federal lawmakers are pushing Uber to provide its drivers with benefits like Social Security.
Customer reviews are mixed. Some users have complained about extreme "surge pricing" during periods of high demand, but others commend the company for boosting innovation and lowering the burden for consumers.
CNBC’s Emily Caruthers reported in March that Uber may be responsible for falling taxi medallion prices in New York:
After hitting an all-time high of $1.3 million in April 2013, the price of a taxi medallion has fallen by nearly a quarter of its value to roughly $840,000, according to New York City's TLC. That drop represents a major turning point for yellow cabs—there had never been a price decrease before 2013—and the shift could be tied to the changing nature of transportation in the city.