The next big thing in global ecommerce: Uber
It’s the end of a long workday, and you have a package that needs to get to your client in another city by tomorrow morning. There’s a Fedex box in the lobby of your office building, but you’ve already missed the pick-up window deadline of 6 p.m. It’s too bulky for a bike messenger, and you are nervous about having it jostled in a courier bag. The solution? You pull up Uber on your phone, see a couple of delivery cars five minutes away, and put in a request. Five minutes later you hand over your envelope to your Uber delivery driver, and receive a text message the next morning that your client has received the package.
This scenario is not unimaginable given Uber’s recent moves into food delivery services and its first major acquisition in the form of mapping start-up deCarta. Fedex and its peers in the global shipping industry should be watching Uber very closely indeed. They are placing large bets on their future growth coming from cross-border digital commerce: witness Fedex’ recent purchases of Bongo and Genco, UPS’ purchase of i-parcel, and more recently Pitney Bowes’ acquisition of Borderfree. A new disruptive competitor coming into the fray whose expertise is in creating great customer experiences in transport and logistics, but has no legacy capital-intensive businesses it needs to manage, could put a potentially major wrinkle in the competitive landscape.
Consider the scale at which Uber’s rideshare services now operate: over 100 cities in 57 countries, with recent additions as far afield from its California roots as Amman, Jordan, and Baku, Azerbaijan. Achieving this scale in such a short period of time has not been without its hurdles: widely-reported wrangles with incumbent licensed taxi services and city governments have given Uber a taste as to what can be in store for a Silicon Valley upstart that challenges government regulation and the entrenched stakeholders who benefit from that regulation. And these wrangles pale in comparison to potential future regulatory battles as it moves into delivery services, particularly those that cross state and country borders. It is difficult to imagine the meetings between Uber execs and leaders of transport unions, for example. But that doesn’t mean it can’t be done – and that Uber’s legal team hasn’t learned lessons that it can now apply to such challenges.
To become a credible commerce partner, Uber will need to raise its game in the art of partnership building, in order to fill its knowledge and capability gaps in global shipping and supply chain. It will also need to enter the B2B world, where a single transaction doesn’t just pass between the buyer (ride requester) and seller (car driver), but between buyer (parcel owner), fleet transport, warehouse, customs inspections, etc, etc. With it’s $50 billion valuation, however, it can afford to acquire that expertise. What it will need to keep in focus above all else is the great customer experience its original app does so well.
As for the existing global shipping companies making ecommerce plays, now is the time to figure out how you are going to respond to Uber. Fighting via lawyers may stave off a more immediate threat, but the cat is already out of the bag. Other ride-sharing companies have emerged, and others will be able to adapt their model if Uber itself should fail due to getting stuck in expensive litigation or overextend itself financially. In this era of digital disruption, a ride-sharing start-up can indeed become a global ecommerce powerhouse if it plays its cards right.