Editor’s note: If you’re new to the gig economy (particularly food delivery and rideshare), you’ll probably hear a lot of bad press about brands such as DoorDash or UberEats (some rightfully deserved). These discussions often focus on the wages on these platforms, workers’ rights, and critiques venture capital-funded startups. It can be hard for a new driver or food delivery worker to see the long-term opportunities. It helps to understand the business problems these brands are trying to solve. In this article, you’ll learn what last mile delivery and the problems with it. Until these problems are solved (with robots or drones probably), there will be an opportunity for you to make money with gig platforms.
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- Gig 101: The Ultimate Guide On How To Do A DoorDash Delivery
The growth of e-commerce has radically changed customer’s expectations of delivery. Amazon first offered two-day delivery to customers to differentiate itself from other services. But, over time, this has become the norm. Customers today expect delivery on the same day, if not within a few hours. And they expect it free or at a nominal cost. This expectation creates shipping and logistics challenges for e-commerce businesses. With the rise in consumer demand, they need to find ways to increase efficiency and lower costs. Optimizing last mile delivery is a big part of this process.
So how does this affect the gig economy? Whether you’re delivering a package for Amazon or takeout for DoorDash, you’re part of last mile delivery.
What Is Last Mile Delivery?
Last Mile Delivery is the final step of the delivery process. This step involves the transfer of goods from a transportation hub or distribution center to their final destination. The final destination could be a home or a retail store. The distance between the start and finish point could be a few blocks or several miles. Doorstep services for packages, groceries, and food all involve last mile delivery.
How It Works
The process for last mile delivery is as follows:
- Orders are entered into a central system where sellers and buyers can track them online.
- Items reach a transportation hub for delivery over the last mile.
- Orders are sorted by the final destination and assigned to couriers for delivery.
- Before the last mile starts, items are scanned to update senders and recipients.
- Couriers transport goods to customers and get proof of delivery.
Challenges With Last Mile Delivery
Manufacturing processes have evolved to reduce cost and improve efficiency. But logistics has struggled to keep pace. Traditional means like UPS and FedEx are not able to fulfill the demands of modern customers.
According to a survey, cost and speed as the top two factors for buyers choosing a delivery option. The “last mile” is the most time-consuming part of the delivery process. It is also the most expensive and accounts for 53% of the cost. There is no shortage of online shopping options for customers. And their reluctance to pay a premium for delivery means businesses have to bear a big part of the cost.
Optimizing last mile delivery results in massive time and cost savings for businesses. Satisfied customers are more likely to order again. Efficiency and returning customers have forced companies to develop innovative ways to make the last leg more efficient.
Last Mile Delivery And The Gig Economy
Labor accounts for 60% of delivery costs. By using gig workers for last mile delivery, businesses don’t need a large delivery workforce. They leverage a ready pool of couriers to get goods to customers as fast as possible. They also save on vehicle, fuel, and maintenance costs. Technology takes care of routing and tracks packages.
The increasing appetite for on-demand services has fueled the gig economy. Delivery giants like Amazon Flex, DoorDash, and UberEats are proof of this. Drones and robots may factor into the equation in the long run. But, for now, gig workers can expect more jobs in last mile delivery.
