UPS Acquires Technology Platform Roadie to Facilitate Same Day Gig Deliveries
【Summary】United Parcel Service (UPS) announced an agreement to acquire technology platform operator Roadie, which will help it facilitate same day deliveries. Roadie’s logistics platform is similar to how Uber works, however drivers pick up packages instead of people. It matches nearby gig drivers with parcel deliveries that are heading in the same direction.
United Parcel Service (UPS) announced an agreement to acquire technology platform operator Roadie, which will help it facilitate same day deliveries.
The amount of the transaction was not disclosed.
Atlanta-based Roadie, which was founded in 2015, operates a crowdsourced delivery platform it calls "on the way." The technology platform is purpose-built to connect merchants and consumers with "gig economy drivers" to offer same-day local delivery services nationwide.
Roadie's logistics platform is similar to how Uber works, however drivers pick up packages instead of people. It matches nearby gig drivers with parcel deliveries heading in the same direction as they are traveling, so its more convenient for the driver to complete the delivery. Roadie has 200,000 verified drivers and has delivered to more than 20,000 zip codes in the U.S.
Roadie claims its first-ever "on-the-way" crowdsourced B2B delivery platform. The platform enables faster and more flexible deliveries and reaches 90% of all U.S. households, according to Roadie. It allows small businesses to offer same day delivery by matching deliveries with nearby gig economy drivers.
Roadie's customers include The Home Depot, Walmart, Best Buy and Delta Air Lines. For Delta, Roadie is delivering lost luggage more quickly back to customers.
UPS says its customers, including large enterprises, have a growing need for local same-day delivery solutions, especially for items that don't have traditional packaging for standard UPS shipment. These items can include bulky, odd-shaped items, perishable goods or items shipped in bags without standard boxes.
These types of items often don't have the required packaging to move through the conveyors and sorting machines of the UPS system, so the Roadie platform will be a better solution.
Roadie's logistics technology, combined with UPS's portfolio, will open doors for new growth opportunities for same-day delivery.
UPS said that Roadie's technology platform will allow it to add more small package capabilities. The acquisition of Roadie will also help it better compete with e-commerce giant Amazon, which can ship items within hours to Prime customers in major metropolitan regions in the U.S.
Amazon aims to have the fastest delivery times in the industry and its investing heavily to build out its logistics network. Amazon's capital expenditures in logistics and data center expansion increased 80% over the previous 12 months, the company revealed in its first quarter earnings report in April.
Although Amazon still relies on UPS to handle a portion of its deliveries, the e-commerce giant is growing its fleet of trucks and planes to deliver more of its own packages. The company now delivers around 66% of its own orders, which is steadily taking away business from UPS and its rival FedEx.
Following the completion of the acquisition, Roadie will continue to operate under the same name and continue providing its services to existing customers. While UPS package car drivers will continue to deliver packages within the UPS network.
UPS said that goods transported by Roadie will not cross into the UPS network and packages transported in the UPS network will not cross into the Roadie network.
The transaction is expected to close in the fourth quarter of 2021.
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