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Forget the Drones. Average Joes Could Be the Answer to Amazon’s Delivery Problems
As the e-commerce giant faces increasing delivery costs, Amazon is considering paying ordinary people to deliver its packages through a new mobile app.
It’s long talked about its drone delivery quest, but now Amazon is looking at developing an app that will pay ordinary people, rather than courier companies, to delivery its packages en route to other destinations.
The Seattle-based retailer has been tight-lipped about whether this app, rumoured to be called ‘On My Way’, has any serious legs, but it is being viewed as a potential solution to Amazon’s rising delivery costs and timeframes, and is another way for the marketplace to get a leg up on its e-commerce rivals.
The service could give Amazon more control over the shopping experience and help curb shipping costs that grew 31 percent last year, faster than revenue with sales only growing 19.5 percent. It also might give the retailer negotiating leverage with the largest carriers.
While there are some possible upsides for Amazon, including cost savings through adoption of freelance delivery, it would face serious logistical, legal and business partnership challenges in implementing the program, and even insiders within the company say the app might not take off.
Amazon has always held speed and convenience as its core values. Besides the standard shipping (or two-day for Prime members), the e-commerce giant has investigated using Uber drivers and taxis to offer same-day delivery on its products, as well as using bike messengers and third-party delivery services for Prime Now and AmazonFresh, both of which function within hours-long (and not days-long) delivery windows.
It also offers its own lockers program, with pick-up stations in various locations and 7Eleven stores that are rented out by Amazon. Customers can choose to have their package shipped to one of these lockers for pick-up at their convenience.
It’s envisaged that Amazon would likely use a similar logistics structure for the rumoured On My Way app, letting users pick up and deliver packages from a convenient location to make some extra money, and enlisting bricks-and-mortar retailers in urban areas to store the packages.
A timeline for this app has not be officially confirmed, but at this rate it’s likely to get off the ground sooner than Amazon’s drone program. Although, despite skepticism, the Federal Aviation Administration Deputy Administrator Michael Whitaker did announce yesterday that “within a year” a plan would be in place for commercial drones to operate in a public space.
The announcement was followed by a very short report saying that Amazon “expects to have drone technology ready” as soon as these plans are announced. Perhaps the plan that appeared to be pie in the sky may eventuate yet.
In the meantime, check out this video courtesy of The Wall Street Journal regarding the On My Way app.