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Today’s pick-up: Uber/Lyft feeding at mass transit trough; USPS between a rock and a hard place

Good day,

Looking to justify their valuations, Uber and Lyft are exploring the disintermediation of global public transportation, which supported 4.4 trillion miles travelled in 2017. In documents filed with the Securities and Exchange Commission, Uber said that a “portion of our trips can be a substitute for public transportation.” Writing last week in the New York Times, E. Tammy Kim acknowledged that Americans badly need more convenient and reliable mass transit. However, the shift contemplated by the ride-hailing firms presents grave consequences, Kim said. Uber and Lyft subsidize rides to increase their number of monthly users, a key metric for investors. But by reducing the cost of individual rides, they draw a privileged subset of passengers away from public transit systems. This undermines support for mass transit, she wrote. Then there is the issue of public accountability. Unlike public agencies which have protocols in place to take care of the systems that Americans use, Uber and Lyft have no obligation to invest in the infrastructure they make money on, she wrote.

Did you know?

The U.S. market for transportation management systems (TMS) software will double to nearly $10 billion by 2025 (Source: Adroit Market Research).

Quotable:

“As the stereotype goes, the public sector is bloated and inefficient; the private sector, lean and ruthlessly productive. And yet Uber and Lyft, billions of dollars in the red, have set their sights on community transit – not because they can do it better but because they need to be bailed out.”

– E.Tammy Kim, writing in the New York Times, May 30, 2019

In other news:

Cainiao looks to speed up China’s logistics digitization

Cainiao Smart Logistics Network wants to speed up the digitization of China’s shipping industry to create $7.25 billion in value over the next three years, the Alibaba Group affiliate said. (Alizila.com)

Parcel reseller looks to grow in Kansas City

Worldwide Express wants to expand operations in the suburb of Overland Park, Kansas, and expand its area office for the third time. (BizJournals)

Smart transport systems pose privacy risks-report

An IDC report said it’s becoming difficult for people to use public transportation systems without surrendering at least some of their personal data. (NextGov)

Clean hydrogen power can refuel debate for transport

Electric-powered vehicles aren’t the only game in town, Ariel Cohen writes. (Forbes)

Kenco Logistics expands supply chain innovation lab

The new dedicated warehouse facility will cover 10,000 square feet and serve as a test facility for potential supply chain management solutions and technological advances, Kenco said. (Supply Chain Digital)

Final thoughts:

The U.S. Postal Service may be painting itself into a corner. In a move with far greater implications for shippers than going to a seven-day-a-week delivery service, FedEx Corp. plans to divert virtually all its postal last-mile business into its own network by the end of 2020. About 20 percent of traffic once tendered to USPS now moves on the FedEx network. UPS Inc. has been diverting postal traffic for years and will continue to do so. Amazon.com, Inc. is doing the same. These are three gigantic customers, and the concern for the USPS is that they are doing a better job than ever to build package density on residential routes. If they weren’t, there would be no reason to divert volume from USPS. E-commerce will continue to grow, and USPS will still find willing customers for its last-mile service. But can its shipping volumes – the one bright spot in a world of declining demand – withstand the loss of its three most important customers?

Hammer down everyone!

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Mark Solomon

Formerly the Executive Editor at DC Velocity, Mark Solomon joined FreightWaves as Managing Editor of Freight Markets. Solomon began his journalistic career in 1982 at Traffic World magazine, ran his own public relations firm (Media Based Solutions) from 1994 to 2008, and has been at DC Velocity since then. Over the course of his career, Solomon has covered nearly the whole gamut of the transportation and logistics industry, including trucking, railroads, maritime, 3PLs, and regulatory issues. Solomon witnessed and narrated the rise of Amazon and XPO Logistics and the shift of the U.S. Postal Service from a mail-focused service to parcel, as well as the exponential, e-commerce-driven growth of warehouse square footage and omnichannel fulfillment.

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