Sunday 23rd Jul 2017 - Logistics & Supply Chain

How big is the threat from Uber-style deliveries?

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The idea of Uber-style delivery services has been around for a couple of years now – and only a couple of months ago we reported Walmart’s plans to trial such services in the United States.

Malory Davies FCILT, Editor.

Malory Davies FCILT, Editor.

Now Amazon has launched its own ‘Uber-style’ service in the UK using part-time drivers to deliver its goods. It is starting in Birmingham and it is planning to role out the scheme to other UK cities.

Amazon is promoting Flex as an “opportunity for delivery partners looking to turn free time into supplementary income. The available delivery blocks may fluctuate week to week and are not guaranteed”.

And it suggest that drivers can earn £13-£15 and hour – this would include tips. Drivers need their own car and Android phone – they must also have a vehicle insurance policy that permits hire and reward. Most ordinary insurance policies do not include this.

So is this a good deal for the drivers? The only evidence I could find came from the US where Amazon pays a guaranteed $18 (£13.70) an hour and drivers seemed reasonably happy with the process.

Then there is the question of the impact that this development could have on the delivery market generally. In particular, is this a threat to conventional delivery operators?

It could be challenging for those with more conventional business models, but the use of self-employed drivers is already a significant factor in the market. Hermes, for example, has some 10,500 self-employed couriers, and says they earn about £9.80 an hour.

Clearly there are both threats and opportunities if more Uber-type schemes take off. Conceivably, drivers could sign up to several such schemes in the hope of cherry picking the best delivery blocks. And there is the challenge of maintaining service quality in a more laissez faire environment.

But, the big test, of course, is whether the customers are happy with their deliveries.

 

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