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Struggling shipping company Shyp retreats to San Francisco

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This shyp has sailed

Photo: Shyp

Once considered the “Uber of shipping,” logistics company Shyp has announced that it’s downsizing its operations in Chicago, Los Angeles, and New York, and will no longer accept new orders in those cities. The company will instead focus on achieving profitability in the single market of the San Francisco Bay Area.

Shyp launched in 2014 and gained prominence for handling all the hassles of shipping items — picking up items from your house, packaging them up, and sending them on their way — all for a flat fee of $5. The startup also promised pickups within 20 minutes.

In a blog post, CEO Kevin Gibbon said the company would also cut some staff from its headquarters. “Knowing what we know now, there’s no question we’d do some things differently. We would have built profitability in from the beginning. And shifted to serve business customers sooner,” he wrote. “In a business that requires significant investment to grow physical operations across multiple cities, we would have focused on achieving success in one market before expanding into others.”

Shyp was initially expected to cater to small-scale merchants like eBay, power sellers, and people who wanted to send gifts without going to the post office. But over time, more people started using Shyp to return things they bought online but didn’t want to ship back themselves. The logistics company is instead focusing on businesses that ship in large or commercial quantities, and is rolling out product features designed for those lucrative customers. The announcement comes only a month after Shyp announced it was expanding its service zones.

“I’ve never felt more strongly that Shyp needs to exist in this world. I’ve seen the impact Shyp has had on our business customers—drastically reducing time spent on packaging and shipping, saving money, and helping them serve new global markets,” Gibbon wrote.

As explained by Fast Company, Shyp’s downsizing is part of a trend affecting more and more “Uber-for” companies that struggle with profitability while catering to the on-demand economy.

Gibbon told Fast Company that he expects Shyp to reach profitability before the end of this year.