A sticker with the Uber logo is displayed in the window of a car.
Photograph by Justin Sullivan—Getty Images
By Kia Kokalitcheva
October 14, 2015

Ride-hailing company Uber is getting ready to ferry a lot more than just passengers.

On Wednesday, the company unveiled an expanded version of its delivery service, UberRush, for bringing customers clothes, food, and flowers to their doorsteps. In addition to its original bike messenger service in New York City, Uber will now deliver in Chicago and San Francisco.

With the initiative, Uber is challenging delivery startups like Postmates, Deliv, and Google Shopping Express. It also opens up a new line of business for the hot tech company as it looks to expand from its ride-hailing roots.

Uber will first focus on delivering orders for small and medium-sized businesses, which it says are ideal customers because creating their own delivery operations are often too expensive and difficult to manage. But the lack of big retailers limits the usefulness of Uber’s service and makes it that much harder for the company to succeed in what is already a crowded field of competitors.

Merchants in cities served by Uber can sign up for UberRush through its website and place requests when they need an order picked up. They simply enter the recipient’s address information and are immediately quoted a delivery time estimate and a price. Both the merchant and the customer can track the delivery’s status via a web link and text messages.

Merchants can also go through one of UberRush’s e-commerce software partners including Shopify, Bigcommerce, Clover, and ChowNow. The idea of the partnerships is to make the service easier for merchants by reducing the number of keystrokes they must make to arrange a pick up. The software automatically figures out if an order qualifies for UberRush based on its weight, dimensions, and on its destination.

In New York, couriers will use bikes to make deliveries. Couriers in Chicago will use cars while those in San Francisco will use both bikes and cars.

Although UberRush is initially available to a limited number of merchants in each city, Uber plans to eventually open it up to all small or medium-sized business.

Uber says its UberRush drivers, who use their own cars, are separate from drivers for its main passenger service, UberX. Although UberX drivers can apply to become UberRush couriers, they must first go through specific training to qualify.

Although known mainly for giving rides to people, Uber has made no secret of its ambitions to also become a logistics company. Within the past year, it started testing a meal delivery service in Los Angeles and Barcelona, and, in recent months, has expanded it to other cities. Co-founder and CEO Travis Kalanick has been vocal about his strategy to push into the delivery business. Nevertheless, the same-day delivery market has become increasingly competitive and it’s unclear if a late arrival can make much headway.

Moreover, Uber has faced a number of setbacks with deliveries. In June, for example, the Wall Street Journal reported that Apple turned down Uber’s bid to become a same-day store delivery partner and instead chose Postmates. Furthermore, Uber must play catch up when it comes to the critical test of signing on as many retail partners as possible. Postmates has already managed to team up with national chains like Walgreens and 7-Eleven, along with e-commerce partners like Etsy.

Uber is also rumored to be planning a same-day delivery service for upscale merchants like Neiman Marcus and Tiffany jewelers, though an Uber spokeswoman dodged the question when asked about it.

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