‘Uber for logistics’ is already happening in Asia, and Uber is getting left behind.

Over the past two years, investors and entrepreneurs have demonstrated a renewed interest in logistics, both in the west and in Asia. Amazon has hedged its bets on drones as the future of package delivery, investing over US$14 billion in the technology since 2010. Startups like Postmates and Wunwun, along with valley giants like Google, Amazon, and Ebay have thrown their hats in the ring in hopes of realizing the elusive “Kozmo dream” – near-instant delivery of anything, anytime.

But the excitement over the amorphous future of logistics is best exemplified by Uber, one of the most forward-thinking and controversial firms of this era. Earlier this year, Uber’s charismatic CEO Travis Kalanick announced the company will eye logistics as its next frontier, stating, “We’re in the business, today, of delivering cars in five minutes. But once you’re delivering cars in five minutes, there’s a lot of things you can deliver in five minutes.”

Let’s think about this for a second – what will “Uber for logistics” look like exactly? The company recently opened a bike courier service called UberRUSH, but it was just an experiment. Kalanick has also waxed poetic on the beauty of self-driving cars, but those vehicles probably won’t become commonplace for ten or twenty years. “Uber for logistics” might also mean the company commits to Kozmo-esque delivery – ice cream, newspapers, and Starbucks on demand – but beyond brand clout (which shouldn’t be underestimated), there’s little evidence that Uber can add value to this already fragmented sector. Needless to say, a shiny Uber Mercedes won’t be used to deliver your pizza anytime soon.

In Asia, however, “Uber for logistics” is already happening. Moreover, the companies offering logistics-on-demand face a market size that far exceeds the market for late-night fried chicken. By shunning fancy black cars in favor of no-frills white vans and trucks, Hong Kong’s Easyvan and Gogovan have beat Uber to the punch.

Applying logic to logistics

The white van industry in Hong Kong bears a strong resemblance to the municipal taxi industries across the US. According to Gabriel Fong, executive chairman at Gogovan, about half of the city’s 70,000 commercial vans are registered with specific companies – meaning they’re not really for-hire. The remaining 35,000, however, are driven by “owner-operators” – in other words, freelancers. These drivers might form contracts with a number of small-to-medium enterprises, but when business is slow, they rely on dispatch centers to receive orders from clients. A driver whose base camp is in Kowloon, for example, might pay a local call center HK$2,000 every month for permission to use radio transmission equipment and receive orders from the center’s phone lines.

Much like the taxi dispatchers in New York City, these call centers generally provide poor customer service and operate under seemingly arbitrary sets of rules. If I open the phonebook to look for a van that can move my couch, I’ll see a long list of call centers, each of which works only within a specific district in the city. So if I want my couch moved from Kowloon to the New Territories, I’ll have to run down the list and contact each center. If I’m lucky enough to find the one that serves my route, that’s still no guarantee that they’ll have a van available.

Gogovan and Easyvan bypass the call centers by providing a peer-to-peer app that connects van drivers with individuals or businesses who need their stuff shipped quickly. While the apps sport different user interfaces, the song remains the same, and if you know how Uber works, you can probably start singing along. Open the app, enter a pick-up location and destination, input special needs (“I’m moving my six pet mastiffs,” “Please bring two dolly carts”), and request a vehicle. After a customer submits an online pickup request, drivers on the network receive a notification on their smartphones and can choose to accept the offer directly.

Gogovan and Easyvan look set to knock over the call center industry like a bowling pin. Fong claims most of the old-fashioned call centers usually have about 20 to 50 vans on their networks, with the largest one topping out at 1,000.  Gogovan, which isn’t yet one year old, claims to have 18,000 vans on its network, while Easyvan claims to have 8,000. Each call center also faces overhead costs for buying and maintaining radio transmitters, along with rent for cellular tower space. But thanks to the magic of the internet, overhead costs for Easyvan and Gogovan are next to nothing.

The ingenuity behind Easyvan and Gogovan partially lies in the versatility of the vehicles they have on their networks – the van.

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