Ride-hailing behemoth Uber has been valued at $US41 billion, making it one of the most valuable private tech companies in the world.
A fresh round of funding could push that valuation even higher, giving the startup a dizzying $US50 billion valuation.
Uber is a five-year-old private company. It’s still growing, fighting regulatory battles domestically and expanding internationally.
But eventually, when it’s ready to go public, Uber will have to prove its valuation somehow.
And though the global taxi market is vast and lucrative, it’s still splintered by region. So even if Uber corners the market on for-hire vehicles, it may not be enough.
The only way Uber can prove a valuation as massive as $US40 or $US50 billion is by expanding into delivery and logistics, allowing its fleet of drivers to move goods in addition to people.
The US transportation and logistics market is highly competitive, but it’s huge, and Uber is well-poised to take a good chunk of that market. In 2012, spending in that sector totaled $US1.33 trillion, making up 8.5 per cent of the US’s GDP.
And Uber has already started to show that it may be interested in expanding beyond people-moving and starting to dive into logistics. In New York City, Uber offers a courier service called UberRush. Its one-off events — in which the company delivers kittens and Christmas trees alike — have been popular.
In some markets, Uber has a food delivery service called UberFresh, and it’s been marketing a carpooling service called UberPool. In Washington, DC, Uber offered a service called Corner Store that delivered things you’d find in a CVS or a Duane Reade, like batteries and toothpaste (Uber Corner Store later rebranded to UberEssentials).
Uber might have some kinks to work out with its delivery services — even with a delivery time of 10 minutes or less, the $US4 delivery fee for UberEATS could be a turn-off to potential customers — but it’s not a stretch to see how people would use Uber’s logistics services, should it expand them.
In addition, Uber only covers merchandise up to $US1000, thus limiting its possible partnerships with high-end retailers. Luxury goods are often shipped in small amounts to keep packages below the maximum insured value, but Uber was unable to meet the insurance of high-price items of clients like online retailer Gilt Groupe. Uber will need to continue to balance the demands of e-commerce companies and laborers as it expands the logistics part of its business.