eBay Now

eBay CEO: Same-day shipping will be everywhere

March 29, 2013: 1:19 PM ET

John Donahoe tells Fortune that eBay's same-day shipping service could eventually serve everyone in the U.S.

eBay CEO John Donahoe says the company's same-day shipping could be a ubiquitous service:

eBay CEO John Donahoe says the company's same-day shipping could be a ubiquitous service.

FORTUNE -- Same-day shipping is inevitable, according to eBay CEO John Donahoe.

While eBay's (EBAY) same-day shipping program, eBay Now, may be available in just three U.S. cities -- with another two coming this summer -- Donahoe foresees a day when customers can get thousands of items from partners like Target (TGT), Home Depot (HD), and Urban Outfitters everywhere within an hour, from Portland to Peoria. "We're looking at the consumer benefits and the retailer benefits," Donahoe tells Fortune. "How it gets connected is wide open."

That means exploring other third-party shipping and transportation systems to exploit excess capacity. Just as say, Airbnb lists available homes and rooms and Uber leverages the downtime of black car and taxi drivers, eBay Now could utilize the excess capacity of shipping services like UPS (UPS). Indeed, the company has already had early talks with two well-known shipping and transportation companies about potential partnerships that would expand eBay Now's coverage.

"I've had newspaper companies come to me and say, we have all these trucks. We deliver these newspapers, and these trucks don't get used after 8 a.m. in the morning. So we have drivers, and we have empty trucks. Can we help deliver?" says Donahoe, who readily points out there are newspaper trucks in every city in America.

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Donahoe's statements come on the heels of Google's (GOOG) announcement this week that it too is entering same-day shipping with "Shopping Express," a service kicking off in the San Francisco Bay Area first. Early testers of the service will receive unlimited, same-day delivery for six months of items ordered from at least nine merchants, including Toys R Us, American Eagle, Staples (SPLS), and Blue Bottle Coffee.

Same-day shipping competition appears to be heating up quickly. Earlier this week, Reuters reported Wal-Mart (WMT) is mulling over an unorthodox crowdsourcing plan to have its own customers deliver items to online buyers. And of course, rumors of Amazon (AMZN) doing widespread same-day shipping -- atop its popular two-day delivery option -- continue to circulate, seeming more like an inevitability by the day. Hiroshi Mikitani, CEO of Japanese giant Rakuten, recently told Fortune that same-day delivery is likely to be a standard feature of e-commerce in the future.

EBay launched its eBay Now mobile app last August and is currently available in San Francisco, New York, and San Jose, with service to Chicago and Dallas coming this summer. It's yet another salvo across Amazon's bow, which some retailers are concerned could usurp their business. Donahoe recently claimed that retailers flock to eBay seeking a technology partner to keep up. "Things like eBay Now with same day, they're organizing assets that are already in the world, rather than replicating those assets. That's 180 degrees opposite from the way our friends up north are approaching things," eBay Marketplaces President Devin Wenig told Fortune late last year, outlining the difference in philosophy between eBay and its Seattle-based competitor.

Donahoe echoes Wenig. "If everyone could do what Wal-Mart is doing, they could do home delivery, but others can't do that." EBay, it seems, is willing to try it for them.

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