People Plus Packages
The ability for anyone to get in their car and open up an app and get business has turned into an enormous market in the past five years. The two biggest categories are “ridesharing” (Uber, Lyft, Sidecar) and “delivery” (Postmates, Deliv, etc).
But there isn’t any reason why these two categories need to be separate. The most efficient utilization of the car and the driver’s time is to put people plus packages into the car at the same time.
And that is what our portfolio company Sidecar is announcing today. Sidecar has leveraged their shared rides technology (where two riders can share a trip and save a lot of money) to make it possible for a driver to pick up a passenger and then a package (or the other way around) and do the trip at the same time.
Sidecar is not doing the delivery piece direct to the consumer (like Postmates or UberFresh) but instead is a third party logistics provider to ecommerce companies that want to offer same day (or same hour) delivery to their customers at a price that is affordable.
Sidecar has been offering “people plus packages” in San Francisco for a while now and it has reached 10% of total ride volume. Their ecommerce partners are getting prices that are up to 80% below traditional same day delivery fees and they have cut delivery times in half. Today they are announcing that they are expanding their same day delivery service to all of their markets in the US.
Combining people plus packages is a win/win/win. Riders get even lower prices for their rides. Drivers make more money (up to 75% more in the San Francisco trial). And ecommerce companies get a less costly and faster way to get their products delivered same day (or even same hour).
Sidecar has a delivery API that allows you to integrate their driver network directly into your app so that your users can see the progress of their delivery in real time. If you are an ecommerce company that wants to leverage Sidecar’s network of drivers around the US, you can visit their Delivery page and learn more.
The innovation cycle in the “ridesharing” market is breathtaking. If you want to stay in the game you have to keep innovating and do that quickly. The result is new services, new markets, and new possibilities. And people plus packages is exactly that.
Perhaps they want to partner with WeDeliver.us in Chicago? I saw @semilshah:disqus wrote about Uber buying up companies that would expand their logistics platform. It’s interesting, and brings to mind M+A in startup land.
Great advancement for delivery logistics. How much marijuana are they delivering?#farmtotable #earlyadopters #dontsmokeyoursupply
Smh….but joking aside this idea could easily lead to Sidecar owning the Denver market for collab co’s
Oh come on guys, doobie serious about this please!
none that i am aware of
In all serious, there’s an “Uber for Pot”…http://blogs.wsj.com/ventur…I bet they have a low burn rate…and high adoption.
Do you want Doritos and Pepsi with that? #plusmarginalrevenue
Nope. I don’t do drugs. Just say No kids!
I’m a big believer in drones for (legal) marijuana delivery. Light weight, high value item, minimal human contact. Drones – Keeping drugs off the streets 🙂
And then a market emerges for intercept drones.
That’s cool, but why stop there? These drivers should also offer services like micro-therapy or nano-coaching to their passengers. Then at the end of the ride, passengers can opt-in to a reality show that uses the footage from cameras in the car. It’s the elusive win/win/win/win/win.
Great serendipity. The way things typically happen. You notice something that seems to work and has potential and you run with it. I always thought that package delivery was regulated by various government entities. I’m guessing the work around for this (if it exists I haven’t researched it) is by not dealing with end users but the logistics providers.I’m wondering though what the advantage of being so public at this stage with the service is and losing some kind of first mover advantage. Not that competitors don’t know this is going on but having something in someone’s face makes them more likely to wake up, feel jealous, and want to do the same thing and compete.. Old school is you keep your mouth shut.
The possibilities are limitless.
that is fantastic. where did you get that image?
google image search “put everything in the truck in india”
I’ve riden on a truck in Ghana that was very similar. A load of cargo, 8-10 people inside. 5 hanging off the back. 2-3 sitting on top. It was quite the experience.It’s experience like that which make me extremely bullish on the long tail of ride sharing: http://www.drewmeyersinsigh…
Shouldnt that be “Put everything in india in the truck” ? 🙂
This is UberNYCPedicabSchoolRideShare
These cats make the Beverly Hillbillies look like George Clooney’s character from Up in the Air!
Another revenue source might be to to contract with people that would like their literature or swag given to people who ride in sidecars. (Similar to give away bags at popular events). Likewise backseat advertising. Maybe this is already being done I don’t ride in these cars so I have no idea..
Or, you can have screens on the back of the front seats playing user+location+destination-aware ads by Google… 🙂
My feeling is that you will get way more money in a local market but not using an auction type system like that. Besides the printed literature (assuming it’s taken) is key to keeping the info in front of someone. This is not a spectacular idea but merely an idea given it’s extra revenue for literally doing nothing.I’ve often wondered why for all the amazon packages that I get there is nothing printed that is inserted in the shipment. This type of thing is well oiled places like B&H Photo will put a heavy catalog in with a shipment and PC Connection (back when I used to use them) always stuffed a printed catalog each and every time (with that “PC Connection” girl). Having been in this business I know they aren’t doing that if they don’t feel they are getting their money’s worth.
Superb idea! Will have to see how much it impacts travel time. If I am paying 30% cheaper in NYC on a typical 15 USD trip. then for 4.5USD savings I cant be late more than 5 mins.
That’s pure genius. I love it!
I thought this was Uber’s intention all along, to also be the Amazon of local delivery. Either way, continuing to iterate full usage of the auto is the future and there appears to be plenty of money to go around in this market! funny pic Bruce Warila
there’s a big difference between doing it direct to consumer under your own brand (UberFresh) and doing it as a service to companies that compete with Uber
Do you think this could put the ups,usps and fedex’s of the world out of business?
Those three are already co-mingling their services. As one might move a package greater distances (cross state or cross country), while USPS (for example) makes the final delivery to the recipients home.I’ve noticed that if something is shipped via UPS and scheduled to be handed-off to USPS for final delivery (common with Amazon these days), but there ends up being a second delivery where UPS must deliver anyway, they (UPS) pull the first package from the handoff to USPS and deliver both themselves. Presumably this avoids a shared fee with USPS for delivering the first package.It might be that the service described in Fred’s blog could or will put pressure on the final delivery server from the larger hubs. They could conceivably compete if trusted. That might suggest that USPS is at greatest risk of competition for that bit of revenue, though not likely anytime soon I would think.
Interesting definition —> “third party logistics provider” …is Sidecar insuring the packages & delivery time? Also that seems like a smart use of data Sidecar already has, but is the business already aligned / optimized as logistics provider in their current model? If not it sounds like a bear of a problem to add another core business..
Ermmm…passenger car/parcel models have existed for decades. The challenge has always been to not ‘rob Peter to pay Paul’ i.e. there are conflicts with similar peak times delivering packages is something not a lot professional passenger car drivers want to unless they are paid the same rate as a passenger AND that’s where it all falls down. It is not commercially sustainable to any scale when delivery models already exist that. Are considerably more price attractive.
I think it depends on the biz Sidecar wants to be in, if they really do have third party logistics provider role figured out it seems reasonable they could deal w/scale issues (though, lots of growth problems there that I wouldn’t be envious of dealing with).
Would this work for marketplaces better or for individual sellers better? (say like a Shopify or Etsy store owner?)
This is so awesome. Does Sidecar plan to encourage people to build applications on top of their api or just integrate with it?
I would love to see offline small merchants integrate sidecar logistics with square readers, use yelp to get customers and offer delivery services from their stores.
Yesss! There is so much waste and excess everywhere, especially energy related. Can’t wait to have them come to Canada.
Anti-Sidecar model. We primarily transport fish, but we will transport people if they going the same way! #Shareyourridewithfish
Supratim, there must be an Indian name Disrupta… 🙂
Hey..you did know my last name is Carp right
Nooooooo. I looked up but could’nt find you anywhere. Thanks for letting me know!
good luck, fred…the #1 challenge for packages vs people is a huge nyc revenue source called the parking ticket. one of my many investments in a delivery company(8x exit on a modest investment) was the budget line for parking tickets! at least they’re few and far between when delivering people…they’re a massive expense when the driver gets out of the car to pick up or drop off.
Sidecar is not in NYC. They don’t operate with licensed drivers so they can’t do NYC under the current regulatory structure
Hmm. You could do a version of inflight refueling. You have licensed drivers circling and rendezvousing with the unlicensed drivers to take care of the last mile. Takes a bit of coordination but that’s actually a good barrier to entry if you can get it figured out. So the unlicensed gets the packages and the licensed are in a sense the hubs that actually handle the customer handoff. Exactly the type of “never will work” that makes it a good idea.
But in Chicago my kids and their friends are using Sidecar over Uber. Like it better.
Cant it be handled by having 2 ppl. One driver and one delivery person. At best you are looking at 15USD more/hr for the driver
Which raises an interesting question as far as why cities don’t charge monthly fees to legitimate delivery companies   in order to avoid random tickets. I’m guessing that a version of this is already being done. Hard to believe that Fedex/UPS are paying for parking tickets in cities. For example in many states you can get “truck” plates for even a car and avoid getting parking tickets in many places that are marked “truck parking only”. Or a “small business tag”. I’ve operated trucks in cities and it can be a random mess to have your drivers avoid tickets. (At least back when I did this ..)
80% of the NY city is commercial parking at 4USD/hr. Still you will see fedex,UPS and other delivery companies double parked and causing nuisance. the parking tickets serves them well.
I knew a FedEx manager in Fremont several years back and he told me that they had a bucket the size of a 55-gallon drum that drivers dropped their parking tickets into. They would get sent somewhere, sorted and either paid or negotiated, depending which city it was.
On a job-to-be-done basis, it seems that irregular things / irregular deliveries are perfect for this: – deliver a large cake to the other side of the city- deliver my punctured tire for repair, and bring it back later- bring my cat to the vet- drop a larger item off for repair (pickup truck drivers)- pick up / return my tuxedo
in the music industry, we tell artists to strap down the amps in the van, as rollovers can happen late at night…
Gutsy move.The winners in the managed crowd sourcing world, regardless of sector, will by definition have to be household brands.Becoming the logistics platform for the broader, less well known, less managed crowd sourced supply chain to compete with the consumer brands is bold.Can’t decide if it is brilliant, desperate or even both.Be good to see someone win by giving plaftorm leverage to a consumer game.
time will tell!
Love this: “Can’t decide if it is brilliant, desperate or even both.”I think it is brilliant until my driver says we need to stop to pick up or drop off a package.
Hi Jim!Often is the case that the economics of leveraging services horizontally has little to do with the key magic that makes the core service work on the market side.Beware of the truth that spreadsheets make you think are gospel.This btw could be a brilliant win but I’m thinking more about the behavior of the market then the economics of the mixed model.
It could be part of the price tiering- like you want the express train or the one that stops in every town?Or maybe the package is picked-up before the passenger, and delivered after the passenger is dropped off. Basically, it uses the available cycles that the driver has. It’s about utilization optimization.
Sounds confusing.Not saying it won’t work, though. Just not for me.
It’s transparent to you as a user. The Packages pickups do not interfere with your ride. I’m not sure what’s confusing about that.
I use Uber everwhere. The power of it is convenience, ease and the fact that it is ‘your’ ride.Tamper with that and it can work, it is simply something different.The thing William that you may be overlooking is that when an Uber or ride is late, you get another.When you send a package, you aren’t the focus, your customer is, and there are always issues. Those issues can only be addressed by the driver and that will interfere with the ride.Transparency exists on a spreadsheet but not I think in the back seat.Can be solved. Gonna be a large issue to get right.
I think it’s a logistical challenge, and I’m going to assume that the software will solve that and direct the driver to do the right thing both for the rider and the package. I’m assuming they will have figured that part out.
I assume that the software will be perfect and won’t figure out the dynamics of the user connection at all ;)Almost never does.
That was my first thought too, Jim. I’ve gotten several brilliant sound bites from Arnold over the year since we worked together.FWIW, in this case, I vote for “both.””Can’t decide if it is brilliant, desperate or even both.” can apply to so many things that it’s now permanently in my lexicon.
The rideshare field is crowded, while delivery services are on the way to getting there. Sidecar delivery is focusing on the B-to-B market. Assuming the volume is there, why not position their entire portfolio, including rideshare, exclusively to corporate clientele? As an incentive, Sidecar can develop a corporate rewards program tied to hotels, airlines, office supplies, etc. Creates a legit point of diff in crowded markets.
that’s good thinkingthat said, their competitors do have B2B ridesharing offerings already, so that is not a wide open market to go after
cool beans. not that i want beans. trying to think of my use case
Beans –> coffee delivery.Stocks….ya got me!
Just had coffee with a 67 year old retired oil patch exec.Talking Uber and he says ‘You can see where they are going…..you need 3 guys and a truck and Pow!…just Uber that.’Uber = Dispatch.
Perfect followup post for my coworkers who didn’t understand my rant about private/shared vs. public/shared transportation solutions last week. Could never see an MTA or other public system ever doing this, which is why I believe private/shared should be the dominant transportation mode of the future. Now if we can just find a private/shared solution that will work for intra-city.
Could never see an MTA or other public system ever doing thisAnd for good reason. Because there are all sorts of gotchas and liability issues. Having a stack of cash, something personal to gain, and a devil may care attitude goes a long way in having things like this be possible. Don’t ever confuse the caution that is old school legitimate “something to lose” with a young company that can and is able to swing for the fences. (Many times by stupidity and lack of knowledge by the way….)My guess is that if angel investors and/or VC’s were only able to make one investment where if they did that investment they actually had something to lose and all the sudden all the “what if’s” would actually matter. This is not to take away anything from the investment industry. But I just hate people loading on traditional enterprises that actually have something to lose if and when the shit hits the fan.
Now I’m wondering when one of these companies will do moving
There’s an “Uber for Moving”….seriously. Google that.
i would add a third opportunity/market : parking (things like zirx) which were not possible before the smartphone
$GRUB adds food delivery. http://qz.com/339659/grubhu…
Plus now there is Valens( GetValens.com) that does it own 1hr delivery for diet, weight loss & Diabetic food. There is instacart.com that does grocery and meal supplies. Seamless & Grubhub have realized the 14.5% commission is too high just to connect restaurants to people. Unless they provide some real service in form of delivery sales will decline. Restaurant business has extremely thin margins(if any) and order commissions of 14.5% + cost of delivery is just not sustainable.
Damn impressive. It really feels like we’re getting so much tangibly closer to “living in the future.” I love the asset utilization side of this. I haven’t thought a lot about this, but there must be some concierge element here, too. That may be a bridge too far for now – getting away from focus, but living in NYC, there are a lot of errands and things that are relatively trivial (go here, do this, pick this up, drop it off here) which tie into parts of this.
The 3P’s again!PeoplePlusPackages
Good points about speed of innovation cycle. Network effects are so strong in this business where the services are largely commoditized and speed and price is almost all that matters (after tablestakes like safety), that new innovation or new market entry to try to increase network size (such as through package delivery) seems necessary to compete with bigger players.
i’m bullish about this Fred. been thinking about same city/zip/day delivery a lot. 100% of shippo customers are ecomm and <10% of packages are within the same city.this is an exciting, cost saving and potentially game changing solution for those same city/zip/day delivery packages ecomm stores do make. think about it this way: the commercial shipping price of a 10lb package with usps priority mail, shipping locally, is $20 with 1-3 day delivery estimate. If sidecar, uber, postmates, etc can do same day delivery for $5-$10/package, then that means we’ve got a new game on our hands!
I did not see this yesterday but I am glad to hear somebody get the past The data and do real logistics
Side Car may not have the network that Uber or Lyft does but if they can make an API that can be incorporated into ecommerce apps/sites tehn even the SMB can have a low cost same day delivery option.Here are some ideas @SunilPaul I wrote about a year or so ago .https://medium.com/@billmcneely:disqus /ubertree-when-crowdsourced-logistics-went-mainstream-313b0bc40441
Gansky, Botsman and Owyang
Brilliant IMO. Great name for brand-building too (yes it could be a classic cocktail business = but not this time). Logistics the make or break. Perhaps ‘passenger’ will become ubiquitous to package or person if customers goals are singularly get me or the package I’m sending there cheap(er) and on time.