Launching a same-day urban delivery system isn’t quite as easy as pushing some code. Delivery people must be hired, routes planned, partnerships struck, parking sorted and pricing adjusted. Supply and demand must be balanced, and data analyzed to do so.
So when word broke Monday morning that Sidecar, the tiniest ride-hailing company with the smallest amount of funding, had launched an SF delivery service, I was surprised. This is an endeavor that Uber has been working toward, in theory, for more than a year. It has been practicing by delivering kittens and roses, and beta-testing pilots of UberFresh’s food delivery in LA and UberEssentials’ convenience store delivery in D.C. (the latter of which it gave up on recently).
And yet here comes Uber’s tiniest, least-threatening competitor, Sidecar, officially launching in San Francisco with a sizable partner in Eat24, and promising to roll delivery out to its eight total markets in the next few months.
Soon after this story published, news broke that Yelp acquired Eat24. A Sidecar spokesperson confirmed that this doesn’t effect its arrangement with Eat24, the partnership is still in place. In other words, Sidecar has teamed up with Yelp.
Was it just big talk about same day delivery or could Sidecar carry through? Do Uber, Postmates, and countless other delivery startups have any reason to be threatened? Is Sidecar delusional?
I hopped on the phone with Sidecar CEO Sunil Paul to ask. We talked about everything from why Sidecar is uniquely positioned to try this model, to whether this counts as a “pivot” for the company. The following has been edited for length and clarity.
How is this different from Uber’s experiments with delivery?
This is a genuine breakthrough. No one has ever done this before, being able to combine people and packages in the same trip and the same car. We’re able to do this because of some unique Sidecar ways of doing things. Namely, we ask for destinations and get destinations from every rider [when they first request a car].
Uber might not be combining people and packages, but it could do that very easily and undercut you.
We are taking a very different approach. We are providing infrastructure to commerce companies that want to enable same-day, on-demand service for their product … It’s not like Uber or Postmates, out to get their own set of delivery consumers. I think that’s important because when you are a commerce merchant, you don’t want to be in competition with a service provider.
What do you mean? Uber does work with service providers. It delivers meals from popular eateries in LA with UberFresh.
It’s closer to something like Munchery with partner restaurants. It’s a small, limited menu that you get to choose and it’s significantly branded “Uber.” A company that’s worth $40 billion and has multiple billions in capital, you have to go after big opportunities and generate the margin off them as much as you can. I think commerce merchants are smart enough to know they need the partners they can trust.
So Sidecar’s smaller size has hurt you in the past with growth, but here it actually helps you?
Exactly … in part because we’re smaller. But it’s also because we require destinations from riders. Having that destination up front is our advantage.
My editor hates this word, but is this a pivot? You said by the end of 2015 you expect half your business to be same-day deliveries. It sounds like your core product has changed dramatically.
As far as I’m concerned, companies large and small pivot all the time. I don’t have any problem calling it a pivot. But [this] has been part of the lore and inspiration for Sidecar from the very beginning. Back when we were first playing around with ideas, my co-founder Jahan couldn’t get a ride home on New Year’s Eve and he finally flagged down a pizza delivery guy and offered him $20 for a ride. His insight was that there are people out there who are willing to give rides. It is something that has been part of the DNA of the company from the founding.
How do you manage supply and demand for a company with as big a network of restaurants as Eat24? What if there aren’t drivers available to deliver food when customers order it?
We have a large network of drivers to start with. We have a large pool of resources. We are able to mix demand for rides with demand for packages or, in this case, hot food.
There are times when a driver might first give a ride to a rider and the next request might be a delivery and the next request might be for another delivery and that same trip combines with a rider. All three scenarios are possible; that’s how we’re able to get more capacity, magnify the efficiency of the network.
What about when things are really busy, like during rush hour? Who gets priority: Packages or people?
Riders don’t want to wait. When a rider is mixed with a package, the package gets picked up first, then the rider gets dropped off, then the package gets dropped off. The rider doesn’t ever know [they’re sharing the ride with a package]. We also have a waiting system … when people order delivery the see a higher than average wait time if a lot of drivers are busy.
Are you working with Instacart?
The partner we talked about is Eat24. We are working with large partners across categories, but we’re not disclosing specific names. The other categories are e-commerce flowers and groceries.
What does the delivery look like on the consumer end? Am I opening my Sidecar app if I order off Eat24?
It looks just like what they have already been experiencing … you’d see it through Eat24’s website or application. That’s what I mean when I say, “We’re an infrastructure provider for Eat24.”
How do Sidecar drivers, who are used to picking up passengers, pick up packages? Do they have to learn how to street park to go inside and get the packages?
It’s training. It’s not that hard, but it is a different behavior. Drivers that are doing pick-up and drop-off of packages go through training.
So not all your SF drivers are delivering packages yet?
This seems like it could be really challenging to pull off. Can I spent an hour with a driver seeing it first hand?
I’m sure you’ll be waiting on the edge of your seats for this next installment Gigaom readers. Until then…