Uber started as a transport company, then became a food delivery company and now it's becoming an online store, e-commerce or, for lack of a better word, a shopping mall. The industry acceptable term is that Uber is a logistics company.
While that is the case it’s also important to understand the industries that are being disrupted by the Uber machinery. According to recent announcements, it seems the retail and e-commerce industries need to start considering Uber as a role-player.
To continue to think of Uber as just a transport company is misleading for retailers and e-commerce businesses. Last week Uber announced major announcements that signal its entry into the broader e-commerce sector.
At the launch event, Uber Eats reinforced its aspiration of building an app of the future by creating a virtual mall experience that goes beyond just food. Uber has included other categories that include convenience stores, pharmacy outlets, alcohol and retail.
This is just the beginning of Uber in the process of disrupting the e-commerce sector. The difference with this type of disruption is that Uber is not working towards replacing retailers, it’s collaborating with them. Uber is closing the delivery gap with its logistics machinery. In the long run, Uber seeks to become the delivery engine of the future for the retail sector.
Uber has just signed a 10-year deal with an autonomous robot entity to deliver goods without drivers. Uber Eats customers in parts of the US may soon have their takeout delivered by a driverless delivery pod built by an autonomous driving start-up, Nuro.
Nuro’s second-generation R2 vehicle is not your typical delivery robot designed only for sidewalk travel. It’s much larger, about half as wide as a compact sedan, but shorter than most cars. It also has no room inside for human passengers or drivers, making it fully driverless in the truest sense. It has a top speed of 45 mph (72.4 km/h), making it ideal for residential travel but not allowing it to go on highways. It can carry a total of 500 lbs (227kg), with space for about 24 grocery bags in its compartments.
Uber has been trying to use robots but gave up due to the complexity involved in developing an autonomous car. Now it has found a perfect partner in the form of Nuro.
The company was founded in 2016 by Dave Ferguson and Jiajun Zhu, two veterans of the Google self-driving car project that would go on to become Waymo. It is one of the few companies to be operating fully driverless vehicles, that is, vehicles without safety drivers behind the wheel on public roads today. The company is one of the few that has been allowed to operate without drivers.
What does this mean for the e-commerce industry? One is that the future of deliveries is autonomous. When Amazon showcased the potential for using drones, it was seen as a pipe dream. Today, drones are seen as another arsenal in the process of distributing goods.
Currently, the industry relies on courier companies that are not always efficient and limited by current transportation constraints.
In the future, e-commerce companies will have to invest in autonomous vehicles or at least partner with them. Uber is showing the way here. Retailers and e-commerce companies should take the recent move by Uber seriously.
This tech giant is done with disrupting the transportation sector. Now its next target is another tech sector instead of a non-tech industry.
Most retailers have just adopted e-commerce. The next big thing for them should be an investment in autonomous vehicles if they are to survive the next move by Uber.
Wesley Diphoko is the editor-in-chief of Fast Company (SA) magazine.
BUSINESS REPORT