Amazon eyes Uber-like delivery service

Amazon (NASDAQ:AMZN) could soon launch a crowdsourced delivery solution that like Uber, uses a mobile app to access a network of regular people to use personal vehicles. Instead of acting as taxies, drivers would drop off packages.

Referenced internally as On My Way, the program could allow Amazon to gain control over shipping costs that grew 31 percent last year, according to the Wall Street Journal.

Reining in shipping costs is a must for Amazon and nearly every other retailer. Free shipping is considered "table stakes" for retailers today. Those who don't offer some kind of free shipping—and the minimum purchase threshold keeps getting lower—are suffering. Amazon is even offering free same-day delivery in some markets, raising the stakes even higher.

And as the holiday season approaches, options that go beyond USPS, UPS and FedEx are key to navigating that last mile. Holiday deliveries have been a minefield for retailers, Amazon included. Even Amazon's Prime offers no guarentee for shoppers as not all items are included in the service.

Apple, too, has been exploring new forms of delivery including Uber. Apple reportedly rejected using Uber for several reasons, including surge pricing and an inability to insure items over $1,000 for deliveries. Insurance will play less of a role for Amazon, which often ships smaller items and offers white glove service for bigger ticket goods such as electronics.

Same day deliveries are one of the biggest trends in retail, especially grocery. This week, Smart & Final announced a partnership with Instacart to make local deliveries and in May Costco and Kroger did the same.

There's also a growing trend of retailers using stores as fulfillment centers. Walmart has reportedly considered using a third party such as Uber to help with same-day deliveries, but has instead turned its focus to perfecting rapid fulfillment and in-store pickup at its discount stores, Neighborhood Markets and Sam's Clubs.

It's been two years since UPS and FedEx ruined Christmas for many families and one thing is for certain: Retailers must reduce shipping costs and offer more customer-friendly delivery options.

For more:
-See this Wall Street Journal story (subscription required)
-See this Fortune article

Related stories:
Amazon adding merchant items to Prime
Amazon Prime shoppers make 50% of all Amazon purchases
Amazon makes same-day delivery free
Amazon Fresh now delivering in parts of New Jersey
Amazon takes on Etsy with Handmade

 

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