Last week, I became aware of a problem after a phone call with the logistics associate for Caviar in Portland. There is a pattern going on that could wreck the food delivery gig for every party involved: the companies, customers, couriers, and restaurants. In this article, I discuss how couriers can bring the whole system down by stacking platforms. I’ll also provide recommendations to address this so that couriers don’t ruin the whole system.
The cause: cross-platform stacking
The root of the problem is couriers trying to make more money by stacking multiple platforms. I call it cross-platform stacking.
Stacking to make more money makes sense.This is fine. Nothing against making more money. But in attempting this particular stack, couriers are not able to be available the whole time for scheduled shifts.
For example, I’ve been scheduling myself for Caviar shifts, but I also keep the Postmates app on as I work my Caviar shift. Lately, when I catch a Postmates job, I turn off the Caviar app. My shift reliability on Caviar has been declining dramatically.
The effect: a reliability feedback loop
Couriers might not be aware of it, but low reliability creates a problem. As courier reliability decreases, the logistics team has to interview and onboard more couriers. This creates more competition for deliveries.
As more couriers are added, shifts are harder to secure and there are fewer jobs to go around. What happens then? The newly added couriers become discouraged by the platform’s earning potential. They turn to the cross-platform stack to make more money. Veteran couriers potentially start doing the same. Some might just quit.
For example, let’s say my shift reliability drops from 100% to 50% because of cross-platform stacking. This means for every hour I’m scheduled for Caviar, I’m only working 30 minutes on the platform. The other 30 minutes, I’m running around for Postmates. That means the logistics team has to hire another courier to replace me for that 30 minutes I’m not working on their platform. This added courier crowds the fight for shifts. If this new courier decided to stack also, his reliability will be less than 100%. Long term, another courier is needed to make up for his unreliability.
Over the long term, the overall courier reliability average will be less than 100%.
See the numbers
If the average courier is 50% reliable, this creates demand for one new courier to make up for the other 50% and in essence more competition for shifts. At 50% average reliability, companies need to double their current fleet.
If the average courier is 33% reliable, this creates two new couriers to compete with him. Triple the fleet.
If the average courier is 25% reliable, this creates the need for three more couriers. Quadruple the fleet.
If the average courier is 20% reliable, this creates the need for four more couriers to compete with him. You get the picture.
As more couriers are added to the system, the more crowded the shifts become and couriers make less money across the board.
The result: a vicious cycle
The result? Cross-platform stacking becomes more attractive for everyone – both old and new couriers.
This creates even more unreliable couriers. Unreliable couriers mean more couriers needs to be hired. Couriers added to the system means more competition for jobs. Competition for jobs leads to less earning potential and more cross-platform stacking. Cross-platform stacking leads to more unreliable couriers. This leads to more hired couriers which increase competition for shifts. This results in more cross-platform stacking. Which leads to more unreliable couriers. Do you see a problem? The cycle doesn’t end and only gets worst.
It’s a vicious cycle where couriers end up, working for slave wages.
It could destroy the system. As couriers flood a platform and then becomes unreliable because of competition, the platforms become more unreliable for customers and merchants. Over time the quality of the delivery service diminishes, and this hurts the company. Bad reviews will become a barrier to getting more people to use the services. Flooding the platform with couriers and not being able to generate new customers is a recipe for disaster.
In short, as couriers continue to stack multiple platforms, all the platforms will be dragged into this vicious cycle, and the whole food delivery gig collapses. This will kill the whole industry!
The solution:
Here are my recommendations to help address this:
- Don’t schedule for shifts if you intend on doing cross-platform stacks. Just turn the apps on and catch jobs that way.
- If you want to stack, stack jobs for one platform only. See this article here on different types of stacks.
- If you must stack multiple platforms, make sure to prioritize one platform over the other. Read how to do that here.
- Remove yourself from shifts if you aren’t sure you’ll be available for the entire shift.
- Couriers should maintain high reliability for scheduled shifts.
- Food delivery startups should track reliability and provide incentives for maintaining high reliability.
Food delivery is in trouble
Lately, I’ve been stacking Postmates, Caviar, and UberEats more and wasn’t aware I was contributing to this problem.
Postmates recently made it so that you no longer need to schedule for shifts. I suspect this move was in part to address this issue and curb unreliable couriers from having priority dispatch during peak hours. I’ve also noticed a lot more bonuses during peak hours. Long term this could hurt the platform’s path toward profitability. Postmates would have to keep subsidizing earning while this vicious cycle goes out of control.
Caviar operates with a smaller fleet in most markets. Their goal is to make sure couriers make the most money. A happy fleet is a good thing. The company exercises more restraint in hiring more couriers to keep couriers satisfied with earning. This could hurt them because a smaller fleet is more susceptible to courier shortage and delayed deliveries.
Investors have cooled in the last two years on food delivery startups. Many brands have shut down. If couriers are unreliable, the remaining brands could see the same fate.
Conclusion
The gig economy is a new concept and has flaws, but it gives workers the promise of flexible work. For segments of our population – college students, folks with debt, the temporarily unemployed, people transitioning careers, single moms, and retired folks looking to supplement their income – the gig economy serves them well.
Launching a tech startup like Postmates, DoorDash, and Caviar is extremely expensive. Growing them is even more costly. If we couriers don’t do our best to help these ventures going, we deny a lot of people opportunities for flexible income. Let’s not do that.
Gainful employment is tough to come by in today’s labor markets. For most couriers, this was probably the easiest jobs they ever have gotten with the most flexibility. Let us not take that for granted and do our best to protect the system for everyone.
I encourage couriers to be more mindful of this problem and make a commitment to being reliable. Please share this with other couriers.
Thanks!
As a former operations manager at postmates, I can tell you Low reliability is factored into schedule forecasts. So is fleet attrition. You like many other blame workers for their predictable self interested behavior for the woes of the entire operation- I find that analysis shallow, silly and misplaced.
I work for caviar now, and they have a much healthier platform with transparency and fair compensation. If caviar were able to grow its merchant and customer base more aggressively, couriers would be making money period. There wouldn’t be a need to stack platforms. The reason couriers stack, is because demand is sporadic and inconsistent times.
This is a very flawed analysis.
Thanks for the comment Diego. This article was written in early 2017. What is described in this article was from my experience with platforms in Portland as a courier and conversations with the operation manager for Caviar in this market. It doesn’t necessarily apply to all markets. Especially not now as food delivery has changed a lot.
Thanks for the insight into the operation from the manager’s side.
I’m not sure what demand is like in your market but here in Portland there’s plenty of money to be made but from my conversations with the Caviar logistics manager, Caviar can’t get enough couriers on the road despite a huge fleet.
As far as stacking, I’m finding out from couriers that stacking isn’t a profitable strategy anymore so people have moved on to other methods such as third party app hacks to exploit flaws in food delivery designs.
I’m sorry, but your essay, “How Courier Can Kill Food Delivery Startups by Stacking Platforms,” is as clear as mud. What is this talk about shifts? Food couriers work on their own schedules. And you coin a phrase — stacking platforms — without defining it.
Hi Joey. My apologies. It’s clear depending on how many platforms you drive for. Some platforms requires couriers to schedule for shifts. Caviar, DoorDash, and Amazon for example. Couriers decide when they want to work but the amount of jobs they get are prioritized by if they are on shift or not.
There’s a link to the platform stacking. It just means working multiple platforms at the same time. The author assumes readers are regulars and recalls an older article about types of stacks. Never meant to coin a the term. Just my way of keeping it simple.