Uber: Drivers will now send consumers return packages for $5

Uber is expanding its range of services to include a new task: sending return packages to consumers.

The ride-hailing and delivery company said Wednesday that its drivers will pick up up to five prepaid and sealed packages and drop them off at a local post office or UPS or FedEx locations. Uber charges a flat fee of $5 for the service or $3 for its Uber One members.

The San Francisco-based company said the service will initially be available in nearly 5,000 U.S. cities.

Uber said customers will have the option to select package drop-off locations in the app. Only locations that will be open for at least the next hour are listed. Once a package is dropped off, drivers receive a visual confirmation.

While the service is expected to be used primarily for returning packages, Uber drivers also ship new packages sealed and with prepaid labels.

The new service offers Uber a great opportunity.

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

Much of that volume comes from delivery to companies that don’t often return packages, Jindel said, and he believes many people continue to return packages themselves rather than paying Uber $5 to do so.

Still, Jindel estimates that demand for Uber’s return service could be around 574,000 packages on weekdays. This would increase by about 25% in January due to the holiday return, he said.