Amazon Is Beta-Testing Uber to Deliver Packages
Amazon is pushing hard to satisfy their customer's demand for same-day delivery. And thanks for Uber and Lyft's aggressive price war, on-demand taxi startups just might make it possible. According to a Valleywag source and the Wall Street Journal, Amazon is now testing out delivering packages with Uber and Flywheel.
One San Jose Uber driver tells Valleywag in an email that Amazon has been summoning random ride-sharing drivers for a delivery "beta test":
Today, after dropping off a fare at SJ airport, I got another fare at [redacted], San Jose. Some Amazon dudes with badges at an old warehouse were beta testing using Uber to deliver packages. On the way there, a guy called me and told me what the deal was: pick up several packages and drop them off in the SJ area. When I got there they put the packages in my trunk in drop off order and handed me an optimized list of addresses. Completed the task in 2 hours and made $50. Not really worth the time or effort, turns out.
It may not be worth the time for an Uber driver, but it could very well be a boom to Amazon's bottom line. According to the driver's Uber receipt and their list of nine deliveries, Amazon paid Uber slightly over $7 for each package drop-off. This could prove to be cheaper than what Amazon pays traditional delivery companies like USPS and UPS.
Delivery costs have been skyrocketing—jumping 32 percent in recent years, the Wall Street Journal reports. In 2013, shipping costs consumed 8.9 percent of sales. That's a sharp increase from the 7.2 percent of sales Amazon paid shippers in 2009.
The Journal also discovered that Amazon has been experimenting with Flywheel, an app which summons traditional taxi cabs.
For its recent test, the people familiar with the matter said, Amazon joined with Flywheel Software Inc., whose cab-hailing mobile app competes with Uber Technologies Inc. and Lyft Inc. Amazon summoned cabs through the Flywheel app to mini-distribution centers before loading them with as many as 10 packages bound for a single ZIP Code, paying about $5 per package for delivery within one hour, according to the people. [...]
Forrester Researcher analyst Sucharita Mulpuru said Amazon may be developing a "same-day delivery algorithm," software designed to evaluate a variety of delivery services at any moment, based on which is fastest and cheapest.
Hopefully that algorithm takes surge pricing into consideration. Shelling out hundreds of dollars to ship a toy helicopter to some dude won't help Amazon with its notoriously thin profit margins.
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Photo: Valleywag Tipster