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UberfinallyunleashesitsFedExkiller,UberRushBusinessInsider

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Uber finally unleashes its FedEx killer, Uber Rush

BIZ CARSON (HTTP://WWW.BUSINESSINSIDER.MY/AUTHOR/BIZ-CARSON/) TECH (HTTP://WWW.BUSINESSINSIDER.MY/SAI/)
(/UBER-RUSH-FEDEX-KILLER-RELEASED-2015-10/#COMMENT-) OCT. 14, 2015, 8:00 PM

Uber

Thenexttimeyouorderaburrito,itmaybedeliveredbyanUberdriver.
Today,UberisgraduatingitsUberRushpilot(http://www.businessinsider.com/howuber
rushworks20144)fromanexperimenttoabusiness.
Firstlaunchedin2014,theUberRushtrialletusershailacourierfromwithinitsapp,likeyou
wouldaregularUber,andtrackthemessengerastheyapproached.
WhenBusinessInsidertriedtheNewYorkCitypilot(http://www.businessinsider.com/uber
rushreview201410),areporterhadaraincoatsheforgotatameetingpickedupanddropped
offwithin20minutesfor$11.
However,thatwasanextraneousandfrivoloususemostindividualsdontneedbike
messengersintheireverydaylife,forgottenraincoatorkeysaside.

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TherealcustomerforUberturnedouttobebusinesses.

Why Uber will deliver your burrito now

ThekeydifferencebetweenthenewUberRushandalotofitscompetitorslikePostmatesisthat
UberRushisdesignedtobeonlyyourdeliverydrivernottheappwhereyouplaceyourorder.
Whenusersopentheapp,selectingtheUberRushbuttonwontpullupalistofrestaurantsor
storeswhohaveguaranteeddeliverywithinanhour.(Postmates,ontheotherhand,displaysits
deliverypartnerslikeChipotleandMcDonaldsandletsuserspickfromamenuofitems.)The
onlyUberRushfunctionforcustomersusingtheUberappwillremainthesameasthetrial
youcanrequestapersonalcourierforthosemomentswhenyouneedyourraincoatdelivered.
TherealbusinessforUberRushwillbeinbecomingthedeliveryfleetforsmallbusinesses
acrossacity.
Ifarestaurantisswampedwithdeliveryordersduringthelunchhour,theycansignontothe
UberRushmerchantplatformandsummonacouriertotheirdoorsteptodelivertheordersfor
them.Ifasmallboutiquewantstoaddsamedaydeliveryfortheirclothingorbooks,thenthey
canadditasadeliveryoption(againsttheslowerstandardchoices).
WhereUberbecomesmostefficient,andmostlikeFedExorUPS,isinitsabilitytopickup
multiplepackagesfrommultiplebusinesses.
MostcustomerswontknowtheyvecalledabusinessthatusesUberRushuntilaftertheyve
checkedoutandreceivethetextmessagethatsaysthedeliveryisonthewaywithatrackable
link.

Uber

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Convenience costs
Conveniencecosts,butUbersdecisiontoturnitfromanexperimentintoarealbusiness
suggestsconfidenceinitsbusinessmodel.
BusinesseswonthavetopayUbertosignupforUberRush.EachUberRushdeliverywillcost
themerchantbetween$5and$7.Uberwillpaythedriver75%to80%ofthatfee,thenkeepthe
rest.Itwillbeuptothemerchantswhethertheywanttopaythecostofdeliveriesoutofpocket
ortackitontotheordertotalthattheconsumerpays.Ubergetsitsshareeitherway.
Postmates,itsmostdirectcompetitorforondemanddelivery,usesasimilarmodel,takingacut
ofthetotalvalueofeachsale.PostmatesCEOBastianLehmann
(http://www.businessinsider.com/postmatesceobastianlehmannantiamazon201510)says
thecompanymakesabout20percentgrossprofitmarginsoneachofitsdeliveriesandison
tracktobeprofitablein2016.
Whilethetwocompaniesmayendupinapricewar,theyreultimatelyapproachingitfromtwo
differentangles.WithPostmates,youorderfromPostmates.WithUberRush,youorderfrom
thebusinessandUberhandlesthedeliveryinthebackground.

Uber

The Uber Rush delivery screen for merchants. Stores fill out the drop-off location and the size of the item, and an Uber delivery
person will come and pick it up.

UberRushsinitiallaunchwillbelimitedtothreecities:Chicago,SanFrancisco,andNewYork.
InSanFrancisco,packageswillbedeliveredviaamixofbikecouriersandcars.ForChicago,its
carsonly,whereasNewYorkdeliverieswillusebicyclesorbeonfoot.

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Fornow,packagesandpassengerswillrideseparately,andanyUberRushcourierwillhave
specialtrainingforthingslikehowlongtheyshouldwaitforadeliveryorhowtobestparktheir
cartorunintoarestaurantforanorder.Uberwillhavetofightforalargeshareofbike
messengersanddriversalike,especiallyinthebeginningwhenthetwowontmix.
IfUbercanbalancesupply,demand,andefficiency,atmassivescale,thentherealthreatmaybe
tobigdeliverygiantslikeUPSandFedExifusersstartchoosingacheaperandfastersameday
deliveryoptiononethatallowsyoutotrackitasitsbeingdelivered.

NOW WATCH: The insanely successful life of Uber billionaire Travis Kalanick
(http://www.businessinsider.com/how-uber-ceo-travis-kalanick-made-billions-2015-7)

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