Why is “Uber for Moving” So Popular?
An in-depth analysis on the recent proliferation of truck-on-demand startups tackling the moving industry.
Seemingly overnight, 13 (I’m sure we missed some) “Uber for Moving” apps have sprung up in many cities across the US.
We estimate nearly $18 million has been raised in the space over the past 2 years alone.1 By the time I finish this post, these numbers will probably already be outdated.
The idea of startups uberizing all corners of the economy is nothing new. Authors dedicate full articles to just how tiresome and meaningless the comparison, “Uber for x” has become. The formula looks something like:
on-demand app + startup = “Uber for x”
If the failure of “Uber for home cleaning” indicates anything, simply applying the Uber model to any market is no silver bullet. But even Uber themselves dabbled in moving for a brief moment with UberMovers, so maybe there is real opportunity to uberize the moving industry.
At moveBuddha, we focus on helping people find the best way to move. Naturally, we wanted to investigate this new genre of providers and figure out if this is all just part of the Uber-everything bonanza or if real change in our industry is afoot.
Dude with a Truck
If you’ve ever lived in a major city you know the pain involved in getting that craigslist couch you just bought across town.
When I was living in LA, we had a “dude with a truck” named Charlie who we would hire to help with small moves. He charged about $50 dollars per hour and could get a couch up a flight of stairs with one arm. The experience with Charlie was much better than renting a truck and cheaper.
Enter, truck-on-demand companies.
These new services offer a web app where you can hire locals who own a truck, van or another large vehicle to help you move. The services aim at micro-moves – moving a studio apartment or single item like a couch or dresser. Costs range $50-$60 per hour. The companies take a 20% cut off the top.
More entrepreneurs are targeting this market because of the low barrier to entry and price edge over the competition. It’s clear micro-moves are underserved in many cities.
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The Competition
If you’re trying to do a small move in a major city, you basically have 3 options: hire a moving company, rent a truck or know somebody with a truck who is willing to help.
Moving companies are generally looking for larger jobs where they can make real money. They aren’t likely to be threatened by services focusing on micro-moves.
Many movers have a minimum size and time requirement and see small moves as a break-even to plug scheduling gaps. Movers won’t be thrilled with new competition, but it’s unlikely they will feel much pain.
Rental truck companies like U-Haul and Budget are likely to feel a sting, although it’s unclear how much of their business is micro-moves. Many of these apps are positioning themselves as a cheaper and easier alternative to renting a truck. They make a great case and it will be interesting to see how the U-Haul behemoth responds to this threat on their monopoly. Competition is good!
While existing solutions don’t pose much of a threat, there is always the looming chance Uber decides to revive UberMovers. Moving seems like an unnecessary distraction given Uber’s global ambitions, but I wouldn’t rule them out completely.
A more likely new entrant would be BellHops, the well-established platform that uses college kids to help with small-scale moves. They were also the official UberMovers test run partner. With a presence in over 100 cities, BellHops could quickly become the largest player in the market.
Big Money in Moving?
Moving has never been the sexiest industry and certainly not the most profitable. To acquire and retain customers is notoriously tricky – moves are much less frequent than cab rides. VC’s clearly see a major opportunity given their large bets in the sector recently, but how big is it?
We could try and back out some numbers from the estimated $15B moving industry2 or $18B truck rental industry3, but those figures likely don’t capture the mostly gray market of pickup truck moves.
If we take a bottom-up approach, roughly 16 million households move in the US each year.4 Let’s say 10% of those moves represent a micro-move in a major city, so roughly 1.6 million micro-moves5. If the average ticket size is around $70 per move, we end up with a total market just north of $110 million. Not bad for the average F-150 owner, but why is there VC interest around such a small market?
Many of these companies are striking up deals with partners like Ikea and Target to do furniture and bulky item delivery. People don’t move often. Getting a consistent flow of jobs from the likes of Ikea represents a much more attractive customer base than moving. Add-in deliveries from craigslist purchases, thrift shops, yard sales, etc. and it’s obvious why investors are rushing in.
But, delivery is a completely different industry with another long list of competitors. While a full discussion is beyond this post, it seems given their price point and level of service, these apps will be competitive.
An Outlier Company
There is one startup taking a different approach to the supply side of the marketplace. Ghostruck works with local moving companies to fill up empty or extra space on their trucks. They provide volume and efficient coordination via their app, turning micro-moves into a profit center for local movers.
Given the contract labor and regulatory headwinds facing the on-demand economy, Ghostruck’s model seems to be a safer bet. If labor negotiations go south in states like California, the low-cost contractor models many on-demand services rely on may no longer be viable.
Final Thoughts
Truck-on-demand isn’t going to dramatically change the moving industry quite yet, but it does offer an excellent solution for micro-moves. It’s definitely an option we’ll suggest in the near future.
As usual, we’ll be keeping a close eye on all the players in this market to see who eventually offers the most compelling service. Stay tuned.
Found an inaccuracy or want to suggest a change, please email me: Ryan at moveBuddha or leave it in the comments.
Notes
1This was a very unscientific census with numbers pulled from AngelList and Crunchbase.
2Moving Services in the US: Market Research Report
3Truck Rental in the US: Market Research Report
4American Moving and Storage Association – About Our Industry
5Yes, I’m completely guessing here. But, even if I double the market size, we still aren’t talking about a huge total market in VC terms.
Company List
Dolly
Chicago, Seattle
Pricing
Pricing based on items and distance. $30 minimum.
Raised to Date
$8,000,000
lugg
San Francisco
Pricing
$2/mile + $.60/driving minute + $.75/labor minute
Raised to Date
$3,800,000
Ghostruck
Boston, Atlanta, Denver, San Francisco, Los Angeles, Seattle, Washington DC, Miami, Austin, Sacramento, San Diego, Portland
Wagon
Seattle, Portland, Phoenix
Pricing
$15/15 minutes, billed in 15 minute increments
Raised to Date
$2,000,000
buddytruk
SoCal, Austin, Chicago
Pikkup
Los Angeles
Pricing
$55/hr + $.80/mile + $2.50 insurance fee, $25 Minimum
Raised to Date
N/A
GoShare
New Jersey, Chula Vista, Oceanside
Muver
Salt Lake City
