Uber enters business of package returns ahead of holiday season

Have a package to return to sender? Uber wants to help with that.

Uber Connect is expanding to handle “the packages you need to return but have been ignoring,” the ride-hailing and delivery company announced Wednesday.

Uber drivers will collect up to five prepaid and sealed packages and drop them off at a local post office or at UPS or FedEx stores for a flat fee of $5, or $3 for its Uber One members.

The service is launching in dozens of metro areas, resulting in coverage of nearly 5,000 U.S. cities to start. 

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Customers will be able to choose package drop-off locations within its Uber and Uber Eats apps. Only locations open for at least the next hour will be listed. Drivers will provide visual confirmation once a package has been dropped off.

While the service is expected to be used primarily to return packages, Uber drivers will also mail new packages that are sealed and have prepaid labels.

The new service gives Uber a vast opportunity.

FedEx and UPS deliver 31 million parcels each day, while the U.S. Postal Service delivers 25 million, said Satish Jindel, a shipping and logistics consultant and president of ShipMatrix.

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Much of that volume involves delivery to businesses that do not return packages often, Jindel said, and he believes many people will continue to return packages themselves, rather than pay Uber $5 to do it.

However, Jindel estimates demand for Uber’s return package service could be around 574,000 parcels on business days. That would rise about 25% in January because of holiday returns, he said.

“According to research from the National Retail Federation, 79% of shoppers under 30 think mail returns are somewhat or very annoying. And with the busy holiday shopping and gifting season fast approaching, we know returns are inevitable – whether it’s the wrong size, the wrong color, or the wrong gift idea entirely,” Uber said in a press release. “Now, Uber can help you get your return en route — saving you time, effort and most importantly, getting you one step closer to a refund.”

Uber Connect launched three years ago as a way to send items to friends, family and colleagues across town. 

The Associated Press contributed to this report.