Can Uber be a hyper-local logistics provider ?

An article in Fortune magazine (October 7,2013) describes the capability of Uber, the taxi app software provider whose main capability rests on the algorithms that enable its drivers to remain utilized by matching the dynamics of the spatial demand and supply of cabs. The article suggests that the same algorithms can make local deliveries a reality, with a steady use of couriers enabling local delivery costs to be kept low enough to be competitive. But will such delivery require the ability to smooth demand using the surge pricing that Uber uses when demand for its services grow significantly ? What capability does Uber have to compete with Peapod, Instacart and Amazon in this space, or will it become a provider to these companies ? Will adjusting delivery lead times, instead of price, provide the smoothing ability that Uber needs, or will the company focus on backhauling and reducing deadhead runs using local delivery as a revenue opportunity when its cabs are idle ?

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About aviyer2010

Professor
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