Faster and faster: Amazon tests using taxis for package delivery

Amazon.com has enlisted taxis in Los Angeles and San Francisco to deliver packages, reported the Wall Street Journal.

The online retail giant used a taxi-hailing app called Flywheel, based in Redwood City, which is competing with Uber and Lyft.

Taxis go to mini Amazon distribution centers to be crammed with packages all going to the same ZIP code. Drivers make as much as $5 per package, with taxis carrying as many as 10 packages within one hour, the Journal said.

Amazon is competing with others like eBay and Google in the same-day delivery arena, although it is unclear how many customers are willing to pay for the faster service.

Another possible reason to use taxis: The company’s delivery costs have been growing as a percent of sale, up to “8.9% last year from 7.2% in 2009,” the Journal said.

Meanwhile, Amazon has begun for the first time to extend some of the perks of its Amazon Prime service to customers who shop at other retail sites, Recode reported. The British fashion retailer, AllSaints.com, began offering Amazon Prime customers free, next-day shipping on purchases.

The deal underscores how important Amazon Prime, a $99 annual membership that gives customers two-day shipping among other perks, has become to the company.

“Prime members spend double the amount that non-Prime members do on Amazon in a year, according to research studies conducted by various industry analysts,” Recode sad.

Above: Photo by Paul Sakuma/Associated Press archives

Michelle Quinn (166 Posts)

Michelle Quinn is a Business Columnist at the San Jose Mercury News. Prior to her current role, she was the Silicon Valley correspondent at Politico covering tech policy and politics. She has also covered the tech industry at the Los Angeles Times and the San Francisco Chronicle. She was a blogger for the New York Times.

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