Amazon is upping the ante in the world of instant delivery.
On Thursday, the company introduced a new service in New York City that it calls Prime Now. Available to those with Amazon Prime memberships and provided through a smartphone app, the service lets you order from a range of more than 25,000 "daily essentials" and have them delivered to your door within an hour for a $7.99 fee. And if you're OK with a two-hour window, the company waives this delivery fee.
The service first became available in the Manhattan neighborhood where Amazon previously leased a brick-and-mortar building near the Empire State Building. According to the news site Re/code, the company is delivering Prime Now items from this site. Later on Thursday, the service area expanded to additional zip codes in Manhattan, and it will continue to branch out to other areas in the city. Next year, Amazon says, the service will also be available in other cities.
The company isn't alone in pushing the limits of same-day delivery from online sites and apps. A couple of months ago, Google doubled down on its same-day delivery service, called Google Express, expanding to more U.S. cities, and various startups are offering similar services, including Instacart, Postmates, and Uber.
Amazon already has a stake in the space with Amazon Fresh, its $299-a-year, same-day delivery service for groceries, which is similar to Google Express. In the world of groceries, Instacart is also well-entrenched, after establishing a partnership with the Whole Foods grocery chain. It's now valued at $2 billion.
Pulling off instant deliveries isn't easy. Late last month, eBay killed its eBay Now app---the same-day local delivery service that let mobile customers shop and receive items from nearby retailers for an extra $5 fee---and folded the service into its main app and website. eBay had planned to expand the service, originally introduced in 2012, to 25 additional markets by the end of 2014, but this did not happen.
But Amazon is in a better position to succeed here. It has gradually built out its own massive delivery infrastructure, and its Prime members---who pay a yearly fee for free deliveries through UPS, the US mail, and the like---have proven to be an active and loyal group, spending more than twice what ordinary customers spend on Amazon in a year.
Update 7:07 PM EST 12/18/2014: This story originally said that Prime Now was available in only one Manhattan neighborhood. The service area added more zip codes later on Thursday, and it will continue to expand.
