A FedEx webpage and the Uber package app page are shown in this photo, in New York, Wednesday, Oct. 4, 2023. Uber, the ride-hailing and delivery company, said Wednesday that it is adding a new task to its list of services: mailing consumers' return packages. (AP Photo/Richard Drew)
By Dee-Ann Durbin
Uber is adding a new task to its list of services: mailing consumers' return packages.
The ride-hailing and delivery company said Wednesday that its drivers will collect up to five prepaid and sealed packages and drop them off at a local post office or at UPS or FedEx stores. Uber will charge a flat fee of $5 for the service or $3 for its Uber One members.
The San Francisco-based company said the service will be available in nearly 5,000 U.S. cities to start.
Uber said customers will be able to choose package drop off locations within its app. Only locations open for at least the next hour will be listed. Drivers will provide visual confirmation once a package has been dropped off.
While the service is expected to be used primarily to return packages, Uber drivers will also mail new packages that are sealed and have prepaid labels.
The new service gives Uber a vast opportunity.
Package returns have become a big business as consumers do more of their shopping online. According to the National Retail Federation, a trade group, 16.5% of online shopping sales were returned in 2022, or $212 billion worth of merchandise.
FedEx and UPS deliver 31 million parcels each day, while the U.S. Postal Service delivers 25 million, said Satish Jindel, a shipping and logistics consultant and president of ShipMatrix.
Much of that volume involves delivery to businesses that do not return packages often, Jindel said, and he believes many people will continue to return packages themselves, rather than pay Uber to do it.
“Consumers do not like to pay to return things,” he said.
Jindel estimates the target market for Uber's return package service is around 574,000 parcels each business. That would rise about 25% in January because of holiday returns, he said.
Still, Jindel has doubts about the service and whether it can be profitable for Uber, since it could cost drivers more than $5 in time and gas to drop off packages. He also said retailers are trying to cut back on the volume of returns by making it harder and more expensive to return items, so that could limit demand for Uber.
Markets are emerging from a turbulent Q3. Horizon’s Mike Dickson shares insights on interest rates, small caps, and where investors should look in Q4 and beyond
Bambu Ventures's Kyle Pretsch dives into Lemonaid’s $10M buyout, down from 23andMe’s $400M price tag, and what’s next after Chrome Co.’s dramatic pivot.
Former Cisco Systems CEO John Chambers learned all about technology’s volatile highs and lows as a veteran of the internet’s early boom days during the late 1990s and the ensuing meltdown that followed the mania. And now he is seeing potential signs of the cycle repeating with another transformative technology in artificial intelligence. Chambers is trying take some of the lessons he learned while riding a wave that turned Cisco into the world's most valuable company in 2000 before a crash hammered its stock price and apply them as an investor in AI startups. He recently discussed AI's promise and perils during an interview with The Associated Press.
Grove Collaborative’s CEO shares how the company is reinventing everyday goods with sustainability at the core and working toward a plastic-free future.
Atlanta Mayor Andre Dickens shares plans for affordable housing, community-led growth, and why private and public grocery stores could be key to food equity.
Tesla reported a surprise increase in sales in the third quarter as the electric car maker likely benefited from a rush by consumers to take advantage of a $7,500 credit before it expired on Sept. 30. The company reported Thursday that sales in the three months through September rose 7% compared to the same period a year ago. The gain follows two quarters of steep declines as people turned off by CEO Elon Musk’s foray into right-wing politics avoided buying his company’s cars and even protested at some dealerships. Sales rose to 497,099 vehicles, compared with 462,890 in the same period last year.
