UPS is entering the same-day delivery game after acquiring crowdsourced delivery platform Roadie

UPS driver

United Parcel Service on Friday announced plans to buy crowdsource platform Roadie, marking the delivery giant’s move into the gig economy space as it tries to expand into same-day delivery.

UPS said it will be able to expand its logistics capabilities with Roadie, the “on-the-way” crowdsourced delivery app, which serves same-day delivery across by enlisting drivers headed a certain direction with extra vehicle storage space to deliver goods to users.

“Roadie’s leading technology, combined with UPS’s portfolio, will open doors for new growth opportunities,” UPS said in a press release. “Roadie’s technology platform also will provide opportunities to improve existing, and potentially add additional, UPS small package capabilities.”

UPS says it is looking to provide same-day delivery options for “goods of all types.” Roadie will be able to provide service for shipments that don’t fit within the purview of UPS deliveries because of the package’s size, perishability, and shipping materials.

Earlier this year, UPS CEO Carol Tomé said the company was looking to create a direct competitor in the same-day delivery space. UPS previously invested in Roadie’s Series A funding round in 2015, and Bloomberg reported the two companies were pilot testing a same-day delivery service together.

Roadie is looking to “scale exponentially” under the UPS banner, the Atlanta-based company told Insider.

The gig delivery space has gotten more lucrative and competitive as e-commerce delivery gets faster. The ever-growing market for same-day deliveries has been previously dominated by companies like Instacart, DoorDash, Shipt, Axelhire, and Amazon. Before UPS’s move into same-day, these smaller gig-back companies were scaling up to build complex logistics networks that could compete with traditional delivery companies like UPS and FedEx.

The announcement also comes ahead of a busy holiday season expected to be further strained by supply chain issues and increased demands for delivery in the time of COVID-19. UPS is expected to increase shipping costs as a global logistics crisis, including labor and supply shortages, impacts shipping capabilities across the industry.

After the acquisition, Roadie will still operate under its name and will still operate independently as a wholly-owned subsidiary of UPS, both companies say. Goods transported by Roadie will not cross over to the UPS shipping network, and vice-versa, according to the release. UPS’s earlier venture into same-day delivery streams highlighted concern from UPS’s unionized workforce under the Teamsters union, who were against company management looking to phase out Teamster UPS drivers.

The companies have not disclosed the value of the transaction, which is expected to close in the fourth quarter of 2021.