Now, the mobility giant’s new product will allow users to send large packages up to 750 kilograms through the Courier XL. As of now, the service allows real-time tracking and pre-pricing, has been launched in the Delhi National Capital Region and Mumbai. Uber plans to launch it in other cities in the coming months.
Although Uber doubles down on its courier service, Swiggy recently shut down a similar delivery service that allows users to feature “operational restrictions” that weighs up to 12 kilograms.
When Uber promotes delivery of large items, Mint Check the company’s strategy and whether it can address challenges inherent in the field.
Why is Uber entering large-scale delivery?
Signals of Uber’s expansion to large delivery indicate the company’s renewed interest in hyperlocal logistics. With the company’s fierce competition and tight profit margins in its core ride-hailing business, large commodity delivery could become a new source of revenue with room for disruption.
An important factor that will play a role is that Uber’s customer base expands from individual users to small and medium-sized enterprises (small and medium-sized enterprises) and other business-to-business partnerships, which may translate into better profit margins and often-occurring revenue.
Paramdeep Singh said the Uber India team has been quietly building in the express delivery space for some time through its 2-wheel fleet, so it is logical to expand to a larger delivery, which is a logical step forward. “Success will depend on Uber’s ability to operate its dense network, build sustainable demand and maintain large-scale service quality,” he said.
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How big is the market for large delivery?
The market for large projects delivered – considering furniture, appliances and bulky commercial goods – huge but untapped. While transportation spaces for food and parcels have become crowded and competitive, large delivery segments are still relatively less saturated.
According to industry estimates, the value of India’s internal logistics market is US$30 billion, most of which is in unorganized industries. There are only a few technology-driven players in this field, and the large delivery sector is already mature. It provides plenty of room for innovation for pricing, reliability and service experience, which is an attractive bet for companies like Uber looking to diversify.
Who are the current players in this field?
From Delhivery’s model of e-commerce packaging packages to Rivigo and Blackbuck’s inter-city transportation business, let’s “the corporate logistics business of transport companies”, many startups have emerged to address different solutions across warehouses, couriers and e-commerce logistics fields.
Porter is one of the few players entering the B2B logistics field, focusing on small and medium-sized businesses and has always enjoyed a stronghold in this category in limited competition. The company dominates the space, with over 500,000 driver partners and over 10 million customers. Several peers like Moovo, Shippr, Zaicus, Blowhorn, etc. have closed stores or are struggling. Like Porter, Uber is adopting the asset light approach and directly competes with the latter.
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Does Uber have an advantage?
Experts say Uber’s infrastructure and technology give it an advantage over other companies in the large extension category. “The segment offers scale, but execution-driven. Uber’s brand trust, driver supply and technical infrastructure give it a reliable advantage that many past and future entrants lack.”
Additionally, Uber’s technology (User-friendly applications and market algorithms) can quickly deploy services like Courier XL, according to Appalla Saikiran, a web platform-wide investor and founder. He added that Uber’s brand, economies of scale and data analytics capabilities provide a competitive moat that will allow it to absorb market shocks and outperform smaller players.
What are the challenges?
From pricing, unit economics, B2B network effects and competition (all of which are difficult to crack), scripts in large commodity delivery are different from rides or parcel delivery. As a US listed company, Uber will face pressure from the perspective of capital and profit margins. Over the years, Porter’s competition will also be a huge challenge in building a business.
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