Connect with us

Global Banking and Finance Review is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website. .

Top Stories

No demand for on-demand means end of road for UberRush and Shyp

UberEats aside, Uber has never realised its full on-demand delivery potential says ParcelHero. Pictured is a trial UberCargo service delivery in Hong Kong.

As the two largest gig-economy express delivery companies fail to deliver, the delivery specialist ParcelHero is asking what happened to the demand for on-demand deliveries?

Back in 2015 express same-day deliveries from local retailers looked to be the next big revolution is shopping. Uber was valued at $50bn as it launched its UberRush merchant delivery service, and the express local delivery company Shyp rocketed to a $250 million valuation. But the e-commerce delivery expert ParcelHero says demand has failed to match the hype and both companies have reached the end of the road this year.

ParcelHero’s Head of Consumer Research, David Jinks MILT, says both UberRush and Shyp were based on the brave new world of the gig economy that now seems to be faltering. ‘In a world of increasing instant gratification, Shyp seemed a great idea as a one size fits all delivery company; delivering, for just $5, anything from a computer to a bike. And “an Uber for things”, as Uber’s General Manager described UberRush at its launch, made even more sense given its vast network of cab drivers waiting for pick-ups, who could also be used for deliveries.’

Explains David: ‘Both UberRush and Shyp were part of a wave of start-ups based on the idea that many consumers were happy to pay an “impatience premium” to get items fast: hence the success of Amazon Prime Now. But this assumption seems to have been false. The demand for instant local deliveries of purchases is there, but it’s not yet large or consistent enough to be a viable business model.’

UberEats aside, Uber has never realised its full on-demand delivery potential says ParcelHero. Pictured is a trial UberCargo service delivery in Hong Kong.

UberEats aside, Uber has never realised its full on-demand delivery potential says ParcelHero. Pictured is a trial UberCargo service delivery in Hong Kong.

David reveals both schemes had other fatal flaws from the beginning. ‘Looking first at Shyp, its one-size-fits-all delivery eventually ended up being its Achilles heel. Moving a large PC for the same cost as an egg cup makes no sense, so its $5 flat fee was doomed. By 2017 it was adding fees on returns and charging up to $25 for extra-large packages. But with its entire business model radically altered the sinking Shyp eventually foundered in January.’

And David says Uber’s recent announcement that UberRush is also closing, on June 30th, reveals similar problems and begs some questions about Uber’s future financing. ‘ParcelHero’s report, The Uberfication of Deliveries,  revealed Uber needs to break into wider markets such as the logistics industry to meet its investors’ expectations. Uber may have been valued at $69bn by 2017 – but our report revealed many analysts believe the entire global taxi cab market is worth just $22. So where was Uber’s extra income potential to come from?’

Continues David: ‘Logistics seemed to be the solution. It’s an industry that accounts for 12% of global GDP, so it’s potentially a lot more lucrative than cabbing. Small wonder Uber rushed into launching UberRush’

David explains: ‘It took a long time for the truth to hit that creating a reliable delivery network is expensive and needs considerable scale to be cost effective. Just as Shyp found, a network based on delivering small express items for local merchants – such as flowers and dry cleaning – isn’t hugely profitable: and larger items such as furniture and fridges won’t fit on a cycle or in a Prius.’

Adds David: ‘The final straw was when Uber introduced UberEats in 2016– which stole many of UberRush’s most lucrative food delivery contracts. So why did UberEats eat Uber’s own lunch? Because with UberRush, Uber only received delivery fees; but with Eats, orders go through Uber’s App, so it earns more on every order. When Uber told its restaurant and catering business contracts to switch from UberRush to UberEats last year, UberRush effectively reached the end of the road.’

Concludes David: ‘As our report reveals, there are still some logistics options open to Uber, such as further developing its UberFreight business, matching loads to truck drivers. But for now, it seems the lack of real demand for on-demand deliveries will leave Uber looking elsewhere for new revenues.’

For more information on the UK’s own gig economy same-day delivery market, and UberEat’s successful formula see:

Global Banking & Finance Review


Why waste money on news and opinions when you can access them for free?

Take advantage of our newsletter subscription and stay informed on the go!

By submitting this form, you are consenting to receive marketing emails from: Global Banking & Finance Review │ Banking │ Finance │ Technology. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Recent Post