myle

“Food & Package Delivery Services, Optimization & Regulation.” 

Does that sound like a fun topic for a Monday afternoon? To members of the International Association of Transportation Regulators, it does! That’s why they organized a panel discussion around it, for their 34th annual conference.

And this Revolutionist, listening in, gleaned some fascinating takeaways—touching on everything from the relative merits of 1099 vs. W-2 drivers to the role New York regulators and lawmakers played in the demise of a mammoth e-trike program mounted by a certain e-commerce giant.

But before we dive deep, let’s meet the cast:

Harry the Rideshare Guy (Harry Campbell)—the moderator—helps operators stay up to date on the gig economy.

Aleksey Medvedovskiy runs Myle, which provides on-demand and non-emergency healthcare transportation, as well as elite passenger service, both on the ground and in the air.

Jamie Spataro is lead counsel for FedEx Ground.

Sasha Ozeran develops business at Hailify, which draws on drivers’ excess capacity to transport passengers and packages. 

Allison Wylie manages global public policy for Uber Delivery.

Gregg Zuman runs Revolution Rickshaws and Revolution X, which, respectively, provide live-electric minicab and live-electric minitrucking services in NYC. He’s also a co-founder and past president of the NYC Pedicab Owners Association and the U.S. rep for work-trike manufacturer Cycles Maximus.

When Harry kicked off the conversation by asking the panelists to define the last mile, Spataro mentioned that FedEx uses the United States Postal Service to deliver packages in local markets. Why? Because USPS is the only carrier in the country that serves every U.S. address; hence, its network can make last-mile deliveries with superior efficiency. 

Soon, however, this might change: FedEx is currently testing a third-generation prototype of Roxo, a last-mile-delivery autonomous robot that can walk down the street. As of December 2021, direct delivery devices—such as Roxo—are permitted in fifteen states. If Roxo et al. should prove viable, they could help delivery companies solve one of their thorniest problems: reconciling what recipients seem willing to pay for delivery with what deliverists need to get paid. As Harry said, deliverists “want more, consumers want to pay less.” And, as Ozeran pointed out, the last mile is pricey—on average, it accounts for 50% of a delivery’s total cost. 

Zuman pointed out that certain companies rely on tips to fill the gap—often, the numbers don’t work if those using the service must pay the full cost of labor. “Last-mile delivery is incredibly easy,” he said. “The problem is that people don’t want to pay for it.”

So how do you drive costs down and productivity up while keeping deliverists and recipients happy? Hailify’s answer is to combine smaller orders into bigger ones, and use their insider view of carriers’ availability to fill their down time: the less time a vehicle spends idle, the more profitable it can be for the company deploying it. 

Hailfy, however, can’t deliver hot food, as the delivery window is too tight; instead, it focuses on groceries, medical supplies—things people expect to receive today or tomorrow. Expanding the delivery window, i.e., taking on deliveries for which customers are willing to wait longer—can also enhance profitability. 

And opportunities are opening up, in that regard, according to FedEx’s Spataro—during COVID, people grew accustomed, for example, to ordering lawn mowers and other home improvement items online.

Uber’s solution is growing and densifying: the bigger and denser your network, Wylie said, the more efficient and profitable you can be. To encourage more merchants to sign on with Uber Eats and Uber Direct—and help them respond to ever-shifting COVID guidelines—they’ve rolled out a number of flexible pricing options in the past year.

They’ve also monitored the interplay between delivering goods and delivering people. When COVID first hit, Wylie said, many Uber drivers eschewed passengers in favor of packages; then, when demand for passenger service picked up again, many switched back.

But some drivers found that they preferred delivering packages—and many of those drivers were women. Overall, women represent just 1% of taxi drivers and 5% of rideshare drivers; they may be cottoning on to package delivery (whether or not they’ve ever tried the passenger side), Harry surmised, because they feel safer when they’re removed from the customer, when they don’t have to interact. 

Ozeran pointed out that, while package delivery usually pays less than passenger delivery, passengers are more “perishable” than packages, i.e., more sensitive to delay. Also, packages don’t talk back to you, or ask you to change the radio station—and you don’t have to clean or sanitize after dropping off a package.

On a related note, Medvedovskiy observed that, while they may have superficial similarities, delivering people and delivering passengers are two different jobs, requiring different sets of skills. Taxi drivers, in particular (as opposed to Uber drivers), bridle at doing deliveries because the packages can’t walk from building to curb, and the drivers are not used to getting out of their cars. 

In addition, he drew a distinction between the two main categories of driver his company deploys: W-2 drivers, he said, are slower than self-employed drivers; they stretch out their tasks, do what normal human beings would do on a salary. The drivers in the elite division, on the other hand, are always on time—not because of their employment status, but because they drive new cars and get paid really well.

Another distinction, of course, in the driver world is how many wheels adorn the vehicle you drive. Globally, Wylie said, the majority of Uber deliveries are done on two wheels. In the U.S., however, four wheelers rule. Why? Because American roads are designed for cars, and American bike infrastructure is not as advanced as its analogs elsewhere. 

New York City, however, is an exception—here, most deliveries are done on two wheels. Which is great—Uber is eager to right-size vehicle choices in denser cities. But cyclists are more vulnerable to injury than motorists. So Uber is working with bike advocates to improve infrastructure. They’re also encouraging e-bike use by offering a discount, and a rent-to-own option, to couriers using Zoomo. Micromobility, she said, will become more and more important as the delivery sector continues to grow.

Spataro added that FedEx, having committed to achieving carbon neutrality by 2040, has been piloting e-bikes, in a bid to reduce emissions. He contrasted this initiative—which would also cut down on pollution—with “Gotcha!” measures like New York City’s idling law, which offers citizens financial incentives to report vehicles that idle for more than three minutes. He’d like to see more energy invested in solutions, he said, not citations.

If regulators really want to get into the solutions business, Zuman offered, they might consider retiring the playbook that stymied the efforts of a certain e-commerce giant to stand up a large fleet of e-trikes in NYC. i.e., panicking because they hadn’t seen the initiative coming and erecting roadblocks at every turn. Instead, why not roll out the regulatory red carpet and adapt? Better yet, governments could provide financial incentives for investing in GHG-free fleets.

One model not represented on the panel—but discovered by this Revolutionist after the fact—is that of CoopCycle, a Europe-centric federation of delivery companies that operate as cooperatives. When coops join the federation, they receive access to its proprietary software and smartphone app—tools no individual company would ever have the funds to develop on its own. 

Is this the wave of the future? Who knows? Either way, the CoopCycle website is worth a visit, if only for awkward-but-heartwarming Google translations like this one: “Isolated courier, you want to join a cooperative or create one? We will help you out!”