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> Finally, Uber is already aggressively moving into this market, and yet no one seems to talk about it - I guess it just isn't as sexy as cars. No, it's becaus

by adwn 10y ago

> Finally, Uber is already aggressively moving into this market, and yet no one seems to talk about it - I guess it just isn't as sexy as cars. No, it's because right now, they're not a logistics company, they're a taxi company. All they do is match supply and demand in a very localized setting, which is a far cry from the likes of DHL or FedEx. Uber is not exactly printing money [1], so I have no idea why you assume that they'll have an edge in the transition to a very different business model? [1] In fact, their only moat seems to be their brand name, and the expensive legal and lobbying battles they fight profit their competitors just a much.

jasode 10y ago
>, so I have no idea why you assume that they'll have an edge in the transition to a very different business model? Like gp, I also think Uber is pursuing the more ambitious goal of generalized logistics rather than just replacing taxis in cities. I have no insider knowledge of this so I just base it on factors such as the number of developers exceeding 1200[1]. It doesn't seem like you need 1200 programmers just to dispatch taxi rides via mobile phones. My wild guess is that they want to turn the mass of drivers out on the streets into a massive "packet switched network" or "mesh network" of transportation. Instead of transporting just people, imagine you could move packages/groceries/deliveries from one car to the next. The drivers don't even have to make the complete trip from point A to point B. The drivers could hand off packages to the next driver using the mobile phones' cameras as builtin "barcode scanners" to track progress within the network. The so-called "Uber logistics network" would be innovative in the sense that they don't require "hubs" like UPS/Fedex. An Uber driver could simultaneously take a passenger to the airport while there's a package in the trunk for delivery to a business that's next to that airport. Today, we have a lot of cars wasting gas on "single purpose" trips. A multi-purpose utilization of the cars already on the road via "smart logistics" could offer cheap same-day deliveries while reducing gas consumption by society. This type of network coordination would require crazy mathematics and algorithms in graphs and combinatorial optimization. Like I said, it's just speculation but the above scenario seems more immediate than the arrival self-driving cars. The "Uber network" is actually complementary to the future of self-driving vehicles. They could first deploy the network of "package delivery" to human drivers and in 15 to 20 years, it is then 100% driven by robots. The underlying graph algorithms stay the same. If Uber isn't the company working on that, then I'm not sure who else is pursuing it. If other companies like Lyft/Amazon/Fedex/UPS are looking into crowdsourced logistics, they are really doing an amazing job of keeping their "skunkworks projects" a secret. [1]http://www.businessinsider.com/the-power-players-of-uber-2016-1?op=0#/#thuan-pham-makes-sure-the-uber-app-stays-up-and-running-3 http://www.businessinsider.com/the-power-players-of-uber-201...
- sokoloff 10y ago
  I can see this maybe making sense for food deliveries, but I don't see the economics working for parcel deliveries. A UPS truck probably costs under $4/mile (including the driver) and carries hundreds of packages. An Uber costing only $0.54/mile (GSA rate) and carrying 1 package is ~20x as expensive on a package-mile basis (and that's not leaving anything for the driver). Uber will need to either dramatically increase the packages per car or (more likely) Uber delivery will be confined to very time-sensitive packages (food delivery and maybe competing in the bike courier space).
  - nl 10y ago
    Or they price packages as a marginal cost on top of the ride-sharing service, and offer steep discounts for people who share rides.
  - jasode 10y ago
    > Uber delivery will be confined to very time-sensitive packages (food delivery and maybe competing in the bike courier space). Yes, it seems like the most obvious pricing advantage would be same-day deliveries. To send a 5 pound package from my address to another address in the adjacent zipcode (~10 miles), the transit time is 1 day and costs $9.85. For that price, I also have to get in the car myself and drive my package to a retail store and drop it off. If I arrange for UPS driver to come to my house to pick it up, the price shoots up to $19.55! Let's say my house is point "C" and my ship address is point "D". If the Uber servers can determine that point "C" is a very minor detour for an Uber driver going from point "A" to point "B" ... then he can cheaply pick up my package and drop it off at point "D" with minimal increase in gas costs. Uber could charge way less than $19 while the driver gets a revenue boost. The UPS "hub" model doesn't make that type of dynamic rerouting cost effective.
- adwn 10y ago
  > Like gp, I also think Uber is pursuing the more ambitious goal of generalized logistics rather than just replacing taxis in cities. I don't deny that. My question was, why would one be so sure that Uber will be successful with that? So far, they haven't demonstrated their expertise in this task (taxi matching is trivial compared with a general peer-to-peer delivery mesh), and putting a lot of investor-backed manpower behind it is not a guarantee. Consider Google or Microsoft, two hugely successful companies, which failed at entering important new markets (social networks resp. mobile devices), and Uber is far from being "hugely successful".
nl 10y ago
I don't think it is a different business model. I think it has been the business model from the beginning. Having a multinational, on the ground door-to-door delivery service really is a moat. I'm in Australia - hardly the poorest market on earth, and FedEx outsources delivery here. Uber has both ends of the delivery service covered for a huge majority of population centers, and I think they are one of the few companies that have that. Yes, I completely concede there is that small airfreight thing to figure out, and that isn't trivial. But the only way the money that have raised makes any sense to me is if they do have some kind of defensible advantage, and I could see it working for them in the logistics market.
- adwn 10y ago
  > I think it has been the business model from the beginning. The delivery business might have been their plan and ambition from day one, but their business model right now is taxi supply/demand matching. > Having a multinational, on the ground door-to-door delivery service really is a moat. What? I said that they don't have a large moat now, I wasn't talking about a hypothetical future. > But the only way the money that have raised makes any sense to me is if they do have some kind of defensible advantage, and I could see it working for them in the logistics market. No, they raised that money to build this advantage, they don't have it yet. Their investors gave them money in the hopes of getting in on the next Google. They might succeed, but it's anything but certain.

by adwn 10y ago

jasode 10y ago

>, so I have no idea why you assume that they'll have an edge in the transition to a very different business model? Like gp, I also think Uber is pursuing the more ambitious goal of generalized logistics rather than just replacing taxis in cities. I have no insider knowledge of this so I just base it on factors such as the number of developers exceeding 1200[1]. It doesn't seem like you need 1200 programmers just to dispatch taxi rides via mobile phones. My wild guess is that they want to turn the mass of drivers out on the streets into a massive "packet switched network" or "mesh network" of transportation. Instead of transporting just people, imagine you could move packages/groceries/deliveries from one car to the next. The drivers don't even have to make the complete trip from point A to point B. The drivers could hand off packages to the next driver using the mobile phones' cameras as builtin "barcode scanners" to track progress within the network. The so-called "Uber logistics network" would be innovative in the sense that they don't require "hubs" like UPS/Fedex. An Uber driver could simultaneously take a passenger to the airport while there's a package in the trunk for delivery to a business that's next to that airport. Today, we have a lot of cars wasting gas on "single purpose" trips. A multi-purpose utilization of the cars already on the road via "smart logistics" could offer cheap same-day deliveries while reducing gas consumption by society. This type of network coordination would require crazy mathematics and algorithms in graphs and combinatorial optimization. Like I said, it's just speculation but the above scenario seems more immediate than the arrival self-driving cars. The "Uber network" is actually complementary to the future of self-driving vehicles. They could first deploy the network of "package delivery" to human drivers and in 15 to 20 years, it is then 100% driven by robots. The underlying graph algorithms stay the same. If Uber isn't the company working on that, then I'm not sure who else is pursuing it. If other companies like Lyft/Amazon/Fedex/UPS are looking into crowdsourced logistics, they are really doing an amazing job of keeping their "skunkworks projects" a secret. [1]http://www.businessinsider.com/the-power-players-of-uber-2016-1?op=0#/#thuan-pham-makes-sure-the-uber-app-stays-up-and-running-3 http://www.businessinsider.com/the-power-players-of-uber-201...

sokoloff 10y ago
I can see this maybe making sense for food deliveries, but I don't see the economics working for parcel deliveries. A UPS truck probably costs under $4/mile (including the driver) and carries hundreds of packages. An Uber costing only $0.54/mile (GSA rate) and carrying 1 package is ~20x as expensive on a package-mile basis (and that's not leaving anything for the driver). Uber will need to either dramatically increase the packages per car or (more likely) Uber delivery will be confined to very time-sensitive packages (food delivery and maybe competing in the bike courier space).
- nl 10y ago
  Or they price packages as a marginal cost on top of the ride-sharing service, and offer steep discounts for people who share rides.
- jasode 10y ago
  > Uber delivery will be confined to very time-sensitive packages (food delivery and maybe competing in the bike courier space). Yes, it seems like the most obvious pricing advantage would be same-day deliveries. To send a 5 pound package from my address to another address in the adjacent zipcode (~10 miles), the transit time is 1 day and costs $9.85. For that price, I also have to get in the car myself and drive my package to a retail store and drop it off. If I arrange for UPS driver to come to my house to pick it up, the price shoots up to $19.55! Let's say my house is point "C" and my ship address is point "D". If the Uber servers can determine that point "C" is a very minor detour for an Uber driver going from point "A" to point "B" ... then he can cheaply pick up my package and drop it off at point "D" with minimal increase in gas costs. Uber could charge way less than $19 while the driver gets a revenue boost. The UPS "hub" model doesn't make that type of dynamic rerouting cost effective.
adwn 10y ago
> Like gp, I also think Uber is pursuing the more ambitious goal of generalized logistics rather than just replacing taxis in cities. I don't deny that. My question was, why would one be so sure that Uber will be successful with that? So far, they haven't demonstrated their expertise in this task (taxi matching is trivial compared with a general peer-to-peer delivery mesh), and putting a lot of investor-backed manpower behind it is not a guarantee. Consider Google or Microsoft, two hugely successful companies, which failed at entering important new markets (social networks resp. mobile devices), and Uber is far from being "hugely successful".

nl 10y ago

I don't think it is a different business model. I think it has been the business model from the beginning. Having a multinational, on the ground door-to-door delivery service really is a moat. I'm in Australia - hardly the poorest market on earth, and FedEx outsources delivery here. Uber has both ends of the delivery service covered for a huge majority of population centers, and I think they are one of the few companies that have that. Yes, I completely concede there is that small airfreight thing to figure out, and that isn't trivial. But the only way the money that have raised makes any sense to me is if they do have some kind of defensible advantage, and I could see it working for them in the logistics market.

adwn 10y ago
> I think it has been the business model from the beginning. The delivery business might have been their plan and ambition from day one, but their business model right now is taxi supply/demand matching. > Having a multinational, on the ground door-to-door delivery service really is a moat. What? I said that they don't have a large moat now, I wasn't talking about a hypothetical future. > But the only way the money that have raised makes any sense to me is if they do have some kind of defensible advantage, and I could see it working for them in the logistics market. No, they raised that money to build this advantage, they don't have it yet. Their investors gave them money in the hopes of getting in on the next Google. They might succeed, but it's anything but certain.