You might know that Amazon is one of the world’s largest websites and retail suppliers. Here are a few statistics that show just how powerful Amazon has become since it first premiered in 1995.
Of Americans who shop online (and have annual incomes of $150k+), 70% have Amazon Prime memberships.
Amazon’s net sales increased 31% just from 2016 to 2017. In 2017, their net sales totaled $177.9 billion.
Amazon has at least 310 million active customers.
Amazon is in the top 10 of global websites, as of August 2018.
Sources: https://www.nchannel.com/blog/amazon-statistics/; https://www.forbes.com/sites/louiscolumbus/2018/03/04/10-charts-that-will-change-your-perspective-of-amazon-primes-growth/#780538fa3fee; https://www.alexa.com/topsites
With all that power and clout, is there any chance that another company could undermine Amazon? Perhaps. For a while, it seemed that, if anyone could usurp Amazon’s position, Uber might be the brand who could do it.
The Power of Uber
Uber is also quite a remarkable brand in its own right. The app, which first came about in 2009, has paved the way for a transformation in the way we work and get around. In many ways, Uber was the spearhead for today’s modern sharing economy.
As of 2017, Uber had 75 million riders taking 4 billion trips in 65 countries.
A few years ago, Uber seemed ready to take on Amazon’s influence by providing for a delivery service of its own. Much like UberEats, the idea was to give customers the opportunity to get packages delivered with flexibility and with ease. With Uber’s massive fleet of drivers, this seemed like a fantastic idea. Yet, it never panned out the way the company hoped. As of this past June, UberRUSH, its on-demand package delivery service, shut down for good.
There are several reasons that Uber’s delivery service didn’t stand the test of time, one being the high opportunity cost involved. As UberRUSH withered, Uber shifted its focus to other aspects of its brand, including UberEats and Uber Freight. But neither of these has the same potential for disruption that UberRUSH promised to deliver. It seems that Uber may want to stick to what it does best, shuttling passengers to their destinations, instead of packages and products.
And maybe that’s what Amazon is doing.
Rather than trying to compete with Amazon in terms of retail, Uber has changed its tactic these days. Recently, CEO Dara Khosrowshahi has declared that Uber aims to become the “Amazon of transportation.” With this approach, Uber would attempt to dominate the point-to-point transportation industry. Now, users have the opportunity, in some cities, to hire bikes or electric scooters. These options are cheaper, but still help the company keep customers interacting with its brand.
There’s the potential for problems, here too, however. With adding more transport options to its roster, Uber could be facing increased issues with the cities it does business in. Disrupting the taxi cab market was one thing, but now, what about the other infrastructure involved in getting around? What will it mean if suddenly more electric scooters are on the streets, or even more bikes? Uber may be “biting off more than it can chew” in this instance.
What About Lyft?
For some reason, Lyft has never gained the same traction as Uber, but they’re still working hard to be competitive. Lyft, too, has shown interest in taking over the transportation industry. While they haven’t made claims to become “the Amazon of transportation” like Uber has, there’s evidence that may be what they have in mind.
First, they’ve introduced a multi-modal routing feature, that provides turn-by-turn directions for each transportation method of transportation. This could incorporate walking to meet your Lyft car, allowing for more efficiency and swiftness in obtaining rides. But more importantly, Lyft is starting to secure partnerships with major American transit agencies such as the Massachusetts Bay Transportation Authority. These partnerships aim to integrate bus schedules and other features into the Lyft app, ostensibly granting a commission to Lyft for rides taken by passengers.
Lyft also is moving towards bike hire or bike-share in various cities. Reports say that they are close to striking a deal to acquire Motivate, a company which operates Citibike, Ford GoBike, and other US-based bike-sharing programs.
How Amazon is Outsmarting the Competition
It didn’t take long for Amazon to sense that Uber could pose a threat, but it seems that they stepped up and kept that from happening.
In 2016, Amazon introduced its own on-demand delivery service. As a major retailer who can also supply seamless delivery, it makes sense that this would be preferred by consumers. After all, it means no third-party delivery service needs to be involved. It seems that Amazon’s attempts to remain relevant and competitive certainly paid off. In 2018, their Prime Now service delivers items to customers within an hour or two. And, to remain even more cutting-edge, Prime Now offers cooked food delivery from restaurants in select cities. Take that, UberEats!
Also like Uber and Lyft, the company’s Amazon Flex has become a new opportunity for freelancers to make money. Instead of signing up as a driver for Uber or Lyft, job seekers could choose to be employed as a contractor with Amazon, delivering packages in their own vehicles, and earning between $18 and $25USD per hour---a better rate than the minimum wage.
What’s in Store for the Future?
Now, it seems that the biggest competition for mastery will be between Uber and Lyft. With its firm footing in the online retail market (and it’s wise forays into delivery), Amazon may be without a direct competitor, especially if they continue to adapt to the latest trends, and adopt the most cutting edge technology.