Amazon has been testing package delivery by taxi, in another effort to figure out how to make same-day delivery workable, the Wall Street Journal reported.
The tests this fall in San Francisco and Los Angeles used taxi-hailing mobile app Flywheel, which competes with Uber and Lyft. Amazon used the app to summon cabs to small distribution centers, then loaded the cabs with as many as 10 packages bound for a single ZIP Code, paying about $5 per package for delivery within one hour, according to unnamed sources familiar with the operation.
As with its recent tests of grocery delivery using the U.S. Postal Service, the taxi deliveries were typically done in the early morning hours when the cabs had fewer fares and were less likely to be noticed by customers and competitors.
Using cabs as delivery vehicles isn’t a new idea, the Journal reported: The German cab-hailing app mytaxi has made deliveries for European retailers and reportedly plans to expand the service to the U.S. Macy’s and other brick-and-mortar retailers use startups to deliver from their stores using fleets of professional couriers and crowdsourced drivers.
But the secret to making same-day delivery profitable — and popular — remains elusive. Forrester Research analyst Sucharita Mulpuru told the Journal that same-day remains a niche service for most Americans, adding, “The reality is, people generally aren’t willing to pay enough for the service to make it worthwhile for these companies.”
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, the story noted.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More