Shyp Shuts Down as On-Demand Delivery Buckles
While we look a lot at what we can buy with mobile payments, we also need to consider how these things are shipped to our location. Whether via ground truck, flying drone, or dropoff in a centralized locker, shipping is vital to the process and existence of mobile payments. Shyp, a company some expected would take off in the on-demand shipping circles, recently bowed out of the process despite a surprising high valuation only recently.
Shyp was valued at $250 million back in 2015, and this was in an era where on-demand shipping companies were commonly expected to do great things. Shyp, however, folded up shop despite the hefty valuation thanks mainly to an inability to grow.
Shyp reportedly had quite a bit of trouble figuring out how to expand beyond San Francisco, and when it expanded into Miami, it subsequently reversed course later. It also missed several target dates to branch out, and back last July, it cut back its staff and shut down every operation beyond San Francisco. Now, it’s completely out, amid a growing number of providers doing likewise.
Shyp’s CEO, Kevin Gibbon, described some of the troubles that ultimately shut down Shyp, saying “We decided to keep the popular-but-unprofitable parts of our business running, with small teams of their own behind them…. While large, established companies have the financial freedom to explore new product categories for the sake of exploring, for startups it can be irresponsible.”
The company, effectively, tried to grow, but not into directions that would keep the company sustained with fresh profitability. It’s not the first time something like this has happened, and it likely won’t be the last. In fact, there’s a good bet that on-demand shipping might have faltered anyway; big box stores are increasingly handling their own delivery. Walmart will let itself in your house and put groceries in your fridge under the right conditions, and Amazon has been frantic to get cargo drones carrying your order in the air for years.
Still, addressing the issue of delivery is vital to the ongoing health of the mobile payments concept; what we pay for must reach us, or what’s the point? Shyp wasn’t up to the task, but there are plenty of others working to fill the bill, so the market carries on.