Merchant Innovation

Why Uber Is Retail’s New Secret Weapon

In today’s on-demand economy, consumers want to track deliveries in real time. Now, Uber wants to help make that possible for just about any type of good that can be delivered.

The ride-sharing app is in talks with on-demand businesses to offer delivery services. The company already runs UberEats, its food delivery service that’s currently operational in 9 cities worldwide. Uber also works with retailers, like the Gilt Groupe and jeweler Alexis Bittar, to offer delivery services.

Uber’s logistical efficiency, combined with its wide presence, is perfectly situated to serve this need, especially given the rise in the number and size of “on-demand businesses.”

Delivery services have always been an important part of the eCommerce model. However, as more and more brick-and-mortar retailers and niche online commerce players emerge, the effort and expense involved in setting up delivery services independently appears to far outweigh the benefits of fulfilling such transactions.

Google-backed Uber, whose play now appears to be on-demand services based on data analytics, is well-poised to serve this need. This would also work to better utilize spare capacity and save costs at a time when the service continues to add drivers aggressively. “If the shit hits the fan and burning money on growth is not accepted by investors, you need to save anywhere you can. You’d want to contract with someone that has the economies of scale. Companies like FedEx can buy gas for their planes and get discounts on everything else involved in the process,” an on-demand startup founder was quoted as saying.

But it isn’t an easy market to break into — even for Uber. In the past few years, a number of startups supporting other startups have emerged: Postmates, SpoonRocket, Washio, Sprig, Doughbies, BloomThat, Shyp, DoorDash, Munchery and Instacart, among others.

To check out what else is HOT in the world of payments, click here.

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LATEST PYMNTS REPORT: MARCH 2020 B2B API TRACKER  

B2B APIs aren’t just for large enterprises anymore — middle-market firms and SMBs now realize their potential for enabling low-cost access to real-time payments and account data. But those capabilities are only the tip of the API iceberg, says HSBC global head of liquidity and cash management Diane Reyes. In this month’s B2B API Tracker, Reyes explains how the next wave of banking APIs could fight payments fraud and proactively alert middle-market treasurers to investment opportunities.

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