Can Uber Replace a Company Delivery Vehicle?

For more than 100 years, retail flower shops have operated their own delivery vehicle. The capital cost of running such a vehicle (lease, fuel, maintenance) and a full-time driver easily exceed $3,000-$4,000 a month in many markets.

With the recent acceleration in crowdsourced companies (Uber, Lyft and many others), many flower shops have started to use these services to augment existing delivery options – in many cases, for last-minute orders and, in a few instances, for all orders.

We were curious as to what the cost difference is between an in-house driver and a fully crowdsourced delivery system. We analyzed the delivery data from three flower shops in three states. We ran each stop (from the prior month) through the Uber API to calculate the approximate total cost, and the results were pretty profound.

In each of the three cases, we estimated savings of 20 percent to 30 percent over an in-house driver. Not only was the cost less but the speed of delivery was two to four times faster than a local truck and driver.

Keep in mind that an Uber driver can offer “immediate” delivery, with no stops from your flower shop to the recipient address. The average delivery time was 32 minutes after the order was picked up at the store. The average delivery time for a florist is two to five hours.

So if you could deliver faster for less money, why would you not do it? You give up some branding control by not having your truck roll up to the recipient’s house, but, really, how much value is there in that? It’s hard to say. For years, people have been saying there is no new business to be had from delivering incoming wire orders. Why would it be any different in this case? So the branding value, if you can even quantify it, is debatable, at best.

No doubt, you can’t use Uber for a funeral or wedding delivery, so a crowdsourced delivery system is never going to replace a local truck 100 percent. But how about if it could handle 50 percent of your deliveries? That would still be considerable savings every year and faster service for your customers.

With Amazon and other retailers (and now many supermarkets) racing to deliver as fast as possible (same day) for as little as possible, there is no doubt this will impact all flower shops in ways we could never have imagined.