UPS, Google’s Schmidt Invest in Uber-Type Delivery Startup

Google Inc. chairman Eric Schmidt and UPS Inc. have invested in Roadie Inc., a service that links people who want packages shipped with people willing to drive them.

Call it Uber for your golf clubs and distant family’s Christmas presents.

Roadie Inc., an Atlanta startup with backing from Schmidt’s venture capital firm, debuted its smart-phone app on Jan. 27.

Like car-sharing service Uber Technologies, its drivers — or “Roadies” — are expected to be regular citizens who just happen to be driving across town or across the country, not necessarily professional drivers.

Roadie Inc.via Bloomberg News

Roadie founder Marc Gorlin has received $10 million in venture capital from Schmidt-backed TomorrowVentures, UPS’s Strategic Enterprise Fund and Warren Stephens of Little Rock, Arkansas-based investment bank Stephens Inc., among others. He already received money from some of the same investors in another company he co-founded, small-business lender Kabbage Inc.

“We were attracted to this business because of Marc’s proven track record, and we like businesses that transform legacy businesses such as shipping and make it a good value proposition for everyone,” Court Coursey, managing partner of TomorrowVentures, said via e-mail.

One challenge for Roadie: knowing what customers have inside their boxes for delivery. The U.S. government has investigated both UPS and FedEx Corp. for unwittingly delivering pharmaceuticals on behalf of illegal online pharmacies.

Gorlin said Roadie will try to prevent that by requiring both the customer and driver to photograph the item. If something illegal still gets through, Roadie will stand by its drivers, he said.

“As with Uber, Lyft or everything else, whenever there’s a service that becomes super successful, there are people that will try to take advantage of it and do bad things,” Gorlin said.

Roadie’s business model might seem to make it a competitor to UPS, which has a stake in it. Neither Gorlin nor UPS would say of what size. A UPS spokesman declined to comment, citing the quiet period before its earnings report. Gorlin suggested UPS recognizes the future.

“The big hoteliers should have invested in Airbnb, the major transportation companies should have invested in Uber,” he said. “That new technology, new way of doing things is going to come.”

UPS ranks No. 1 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers.

The company is part of the growing “sharing economy” that brings together buyer and seller, typified by Uber and home-sharing service Airbnb Inc.

Roadie Inc.via Bloomberg News

The challenge facing Gorlin is standing out from many other similar startups. Altimeter Group, a San Mateo, California-based research firm, recently wrote about more than 200 of them, ranging from textbook-sharing apps to rent-a-friend startups.

“Who doesn’t want to get paid for being a good neighbor?” Gorlin said in an interview. “This seemed to be an area that did not really have a good answer, and the existing models that work for all the major delivery companies kind of breaks down on the individual item.”

Roadie has quietly been testing its app in recent months and it will go live today on Apple Inc.’s App Store and Google Play. Gorlin, 42, dreamed it up while outfitting his condo in the Florida panhandle with tile in the bathroom.

When the tile shipment got delayed in Birmingham, Alabama, “I said, Surely, someone in Birmingham is heading to Florida and they’d stick a box of tile in their truck,” he said.

When people open Roadie’s app, they will find a “heat map” showing locations where customers have packages ready to be picked up, or “gigs” in Roadie-speak. For now, only customers in eight Southeastern states can list their packages for pickup, but Gorlin hopes to expand nationwide soon. Also, Gorlin expects to announce places to meet up at various chain retailers, so nervous customers don’t have to invite drivers to their homes, he said.

The fee for a delivery will range from $8 to $150 based on distance and the urgency of the delivery. The driver will keep 80 percent and give the other 20 percent to Roadie.