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End of Gig Economy? No demand for on-demand means end of road for UberRush and Shyp

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SmittenKitten
2096 Rider
 Posted 4 years, 4 months ago

UberRush and Shyp are no more.  This tells a much bigger story though.  You know how everyone talks about "Uber for Something?"  The whole Gig Economy we were all super excited about?  Apparently, there is no demand for it (yet?).

The fact that Uber is already pulling the plug is telling.

"ParcelHero’s Head of Consumer Research, David Jinks MILT, says both UberRush and Shyp were based on the brave new world of the gig economy that now seems to be faltering. ‘In a world of increasing instant gratification, Shyp seemed a great idea as a one size fits all delivery company; delivering, for just $5, anything from a computer to a bike. And “an Uber for things”, as Uber’s General Manager described UberRush at its launch, made even more sense given its vast network of cab drivers waiting for pick-ups, who could also be used for deliveries.’

Explains David: ‘Both UberRush and Shyp were part of a wave of start-ups based on the idea that many consumers were happy to pay an “impatience premium” to get items fast: hence the success of Amazon Prime Now. But this assumption seems to have been false. The demand for instant local deliveries of purchases is there, but it’s not yet large or consistent enough to be a viable business model.’"

Another except:

"David reveals both schemes had other fatal flaws from the beginning. ‘Looking first at Shyp, its one-size-fits-all delivery eventually ended up being its Achilles heel. Moving a large PC for the same cost as an egg cup makes no sense, so its $5 flat fee was doomed. By 2017 it was adding fees on returns and charging up to $25 for ex…

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UberRush and Shyp are no more.  This tells a much bigger story though.  You know how everyone talks about "Uber for Something?"  The whole Gig Economy we were all super excited about?  Apparently, there is no demand for it (yet?).

The fact that Uber is already pulling the plug is telling.

"ParcelHero’s Head of Consumer Research, David Jinks MILT, says both UberRush and Shyp were based on the brave new world of the gig economy that now seems to be faltering. ‘In a world of increasing instant gratification, Shyp seemed a great idea as a one size fits all delivery company; delivering, for just $5, anything from a computer to a bike. And “an Uber for things”, as Uber’s General Manager described UberRush at its launch, made even more sense given its vast network of cab drivers waiting for pick-ups, who could also be used for deliveries.’

Explains David: ‘Both UberRush and Shyp were part of a wave of start-ups based on the idea that many consumers were happy to pay an “impatience premium” to get items fast: hence the success of Amazon Prime Now. But this assumption seems to have been false. The demand for instant local deliveries of purchases is there, but it’s not yet large or consistent enough to be a viable business model.’"

Another except:

"David reveals both schemes had other fatal flaws from the beginning. ‘Looking first at Shyp, its one-size-fits-all delivery eventually ended up being its Achilles heel. Moving a large PC for the same cost as an egg cup makes no sense, so its $5 flat fee was doomed. By 2017 it was adding fees on returns and charging up to $25 for extra-large packages. But with its entire business model radically altered the sinking Shyp eventually foundered in January.’

And David says Uber’s recent announcement that UberRush is also closing, on June 30th, reveals similar problems and begs some questions about Uber’s future financing. ‘ParcelHero’s report, The Uberfication of Deliveries,  revealed Uber needs to break into wider markets such as the logistics industry to meet its investors’ expectations. Uber may have been valued at $69bn by 2017 – but our report revealed many analysts believe the entire global taxi cab market is worth just $22. So where was Uber’s extra income potential to come from?’"

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Comments

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    eyekeyah
    95
     4 years ago

    I'm not surprised it didn't work. Logistics is hard.