Forget drones, Amazon has been experimenting with a far more innovative method of providing same-day delivery to its customers. As part of a new pilot program, it turns out that one of the most efficient methods of getting packages to doorsteps are good old-fashioned yellow taxis.

Advertisement

According to the Wall Street Journal, Amazon is making deliveries in San Francisco and Los Angeles which use the taxi-hailing app Flywheel to summon cabs to local distribution centers. There, the cabs are loaded up with "as many as 10 packages bound for a single ZIP Code, paying about $5 per package for delivery within one hour."

While same-day delivery is become more and more common for many retailers, companies like Amazon, Google and eBay are all experimenting with different methods to get goods to consumers as fast as possible, with services like eBay Now touting its "one-hour or less" delivery in five American cities. But these kinds of services are often made with dedicated vehicles, which can be pricey for the customer, or rely upon hefty rates imposed by existing shipping services. Amazon Fresh, for example, delivers through the U.S. Postal Service, and it definitely ain't cheap.

Advertisement

Taxis sound low-tech but logistically they make sense. They're more direct than UPS or FedEx, and much cheaper than courier services. The key is for Amazon to be able to conduct a lightning-fast cost-savings analysis for each outgoing package: It's not only deciding which deliveries to bundle into a single cab, geographically, but also how long to hold certain packages before they should simply go out in a cab alone. Forrester Researcher analyst Sucharita Mulpuru told the WSJ that Amazon is working on developing an algorithm that will funnel packages towards the most appropriate delivery method.

While deliveries (of goods and not people) are certainly something that rideshare companies are exploring, it's only been in a very limited way so far—Uber has a bike messenger service in New York City, for example. But I suppose when it comes to cabs delivering my brand-new flatscreen, I'm more worried about the customer service angle. Are the taxi drivers responsible for making sure the packages are safely delivered? Are they carrying insurance?

There is one bright side for the taxi industry, where drivers are feeling the hit from rideshare apps: Amazon deliveries could create an additional stream of income for cab drivers, especially when they're not as busy in the morning. [WSJ]

Sponsored

Ross D. Franklin/AP