“Are they allowed to do that?”

There were heated discussions on this issue in the media when US taxi company Uber began to offer its services in Germany. Because the majority of the colourful flock of Uber drivers do not have a taxi licence, local taxi companies were not happy. In Germany, Uber considers itself to be more of a car-sharing agency and defends itself with legal methods. When the company said on television that German laws were totally obsolete in this respect, it immediately landed itself in court proceedings.

But actually, the legal issues are not the most fascinating thing about Uber. What is more interesting is how Uber’s technology works and can be applied to various business models. Uber announced that it wants to compete in home delivery and it has already started doing this, at least in the US capital of Washington D.C. At first sight, this appears to make sense: during non-peak periods, Uber taxi drivers could collect orders for goods and deliver these to customers.

However, some crucial questions remain unanswered: do the drivers have to go shopping for the goods themselves in local supermarkets and shops, and then make the delivery arrangement? That sounds expensive. Or does Uber use the supermarkets’ click and collect service, which means that the drivers only have to pick up the ready-packed goods? This would be a smarter way. Or do they even have partnerships with supermarket chains? Companies like Tesco and Walmart have invested massively in home delivery – whether they would use Uber as part of their delivery service (and of course whether the ambitious start-up company would be happy with this role) remains to be seen. 

Even if the company thrives from its innovative software, at the end of the day, there is still an important question for both its taxi and home delivery services: how good is the quality of its services? Ultimately, that depends on the people that Uber, as drivers and delivery agents, can attract. Negative customer experiences at their front door or in the passenger seat would deal a severe blow to the idea of “shared economy” which Uber swears by.

However, what will catch on regardless of Uber’s market success is the company’s software concept. Uber has a system that brings together transport orders in real time with the next free and suitable vehicle. Because a significant proportion of transport orders are typically received spontaneously in a taxi company, the optimisation of the process is done on a virtually on-going basis. If it was feasible to accommodate a high number of orders and a high number of vehicles, then the overall system will run on a high degree of efficiency.

Such optimization solutions already exist in freight transport – and are currently being used without any legal hassle at all. Waberer’s, one of Europe’s biggest truck forwarding agencies with 3,300 tractor units, is using a similar solution for the planning of tramp transport, which covers the entire EU. Its company director György Waberer explained at the International Commercial Vehicles Motor Show that Waberer trucks are on the road throughout Europe. If they become available, they are assigned the next order by a computer-assisted system in a way which optimizes costs and revenue. Empty runs and waiting times are minimized and restrictions, such as the drivers’ allowed driving duration, are taken into consideration.

Compared to freehand planning, computer-assisted planning can save large fleet operators six-figure or even seven-figure sums each year. Especially so if the operator is able to integrate changes to the order situation or the vehicle location in real time. This requires extremely powerful and efficient calculation algorithms, just like what are being used in the DELMIA Quintiq planning and optimization software. The DELMIA Quintiq solution has helped companies in the transport and logistics sector for strategic, tactical and operative network and route planning. Such dynamic planning solutions are far superior to the classic static route planning systems. Static systems calculate the optimal plan for a specified time period and then locks this in. Dynamic systems help dispatchers factor in changes to the order situation right up to the very last moment – allowing them to work with an optimal plan at all times. This provides dispatchers with a crucial competitive edge in the fiercely competitive European transport market.

But unlike Uber’s business model, there won’t be any tremendous bumps in the road. 

Contributed by Björn Helmke