First of all, a disclaimer: I work for Flywheel, a competitor of Uber. The opinions expressed here are my own, and are not endorsed by Flywheel.
That out of the way, Uber is delivering Christmas trees to, um, the quite wealthy. But let’s say that you feel like $135 is a reasonable amount to pay for the convenience of Christmas tree delivery. Still, what makes Uber a good deliverer?
Matthew Yglesias notes that despite Uber’s aspiration to be thought of as a logistics company, they are in fact a transportation service provider. But he pays lip service to the idea that Uber’s underlying technology could in fact be of use to a logistics company.
Maybe it can. But I’m kind of in doubt. Look, it’s never been hard to get things quickly delivered to arbitrary addresses in metropolitan areas. It’s just expensive. Courier services existed long, long, long before Uber did. Courier services didn’t become gigantic juggernauts because the economics don’t make sense. And I don’t think that Uber changes a single thing about that.
To the extent that Uber is a technology company (and it’s only partly a technology company: the other part is a taxi monopoly arbitrage company), its technology is about conveniently getting a car to an arbitrary place, and doing so in a matter of minutes. And you pay a premium price for that. When I say “an arbitrary place,” I really mean “an arbitrary place.” Like, “Oh, whatever restaurant or street corner I happen to be at right now.”
At risk of belaboring the point, you don’t want or need Christmas trees at whatever restaurant or street corner you happen to be at right now. And nobody says “I just up and decided, what the hell, I guess I will celebrate Christmas this year! Maybe I should get a $135 tree in fifteen minutes!” That’s what aliens who have only read about humans say. And once you’re outside of the mode of “I don’t exactly know where I am,” and “I need this in fifteen minutes,” much of the convenience thing goes away. If you want a Christmas tree, are you really going to object to waiting until you’re in front of a computer to ask for the form, and typing in your address?
And this is all relevant not just to Uber’s silly Christmas tree stunt, but to their broader aspirations to being a logistics company. There aren’t many things that you want delivered to wherever the hell you happen to be standing. There are a few things, but not a huge number of things that you really want to get delivered in a matter of minutes. And there are yet fewer things that you’re willing to pay a huge premium for the service of this fast delivery to an arbitrary point.
As silly as Amazon’s drone stunt was, it was a lot more interesting than Uber’s Christmas tree stunt. Because while drones aren’t going to be practical for a while, a robotic delivery system would genuinely transform the logistics industry (especially if it’s paired with Amazon’s amazing warehousing system). And that’s because the fundamental thing needed to make more pervasive delivery possible is not nice cars, accommodating drivers, convenience of ordering, or taxi arbitrage. It’s price. The technology that we’re lacking is one of driving down cost, not improving convenience of ordering.