Google Express Plans to Shut Down Its Two Delivery Hubs

Google Express, the search giant’s same-day delivery service, is shutting down its two delivery hubs in San Francisco and Mountain View, Calif., according to sources.

The move is part of a broader push within Google to revamp the service, which launched in March 2013, after it failed to make a serious dent in a market crowded with Amazon and a myriad of on-demand startups.

The service is not shutting down, but seems to be recalibrating a logistical plan it was testing in California.

Express was hatched out of Google’s commerce plans, formed, in part, to hedge against Amazon’s growing foray into product searches. It is now in seven major cities. In most of them, Google delivers goods from retail and shipping partners. When the service arrived in the Bay Area, Google tried out a hub model. Customers would order from Google’s retail partners, and drivers delivered the goods from the two locations on the same day or overnight.

Now, Google is changing course. And the change comes after a tumultuous year for the company’s commerce initiatives: It lost the exec atop Express, Tom Fallows, then the exec atop all of commerce, Sameer Samat. After Fallows’s departure, Google shook up the Express leadership multiple times, putting the business development lead for Google Shopping, Brian Elliott, at its helm in July.

Google declined to comment on the decision to shutter its delivery hubs.

Rising costs of the drivers and vehicles are likely one rationale. According to multiple sources, Google is trying to curb these by outsourcing its delivery to other on-demand startups and has held initial talks with multiple companies, including Postmates and Flywheel.

Google notified its retail vendors that it was closing the San Francisco hub on June 30. It plans to shut its Mountain View hub in the coming months. In July, a California local with the Teamsters Union said workers for Google Express, who are hired through the HR firm Adecco, are planning to unionize.

Additional reporting by Carmel DeAmicis

This article originally appeared on Recode.net.