

Last Mile Logistics: Amazon vs. Fedex vs. Startups - ethikal
http://www.datafox.co/blog/last-mile-logistics/

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gmisra
What's interesting to me is that "last mile logistics" is essentially a
commodity business. But there are two very common trends in the space that
don't quite make sense to me:

1\. Treating delivery drivers as "independent contractors". This seems to be a
very common approach, with all kinds of plausible motivations (limiting
liability, making variable demand handling easier, being able to call your
service a "platform", keeping headcount cosmetics appealing for parent VCs,
etc). Historically, delivery driving is a usually regulated and often
unionized industry, so I wonder if this approach will scale. There are also
often distortionary impact of these contractors on overall regulated wage
industries (hint: your postmate probably does not make a living wage for the
time spent being a postmate). Viewed from the lens of potential acquirers, if
your "efficiencies" are based around not paying drivers in the same way they
have been historically paid, that is not something I need to acquire.

2\. User acquisition seems to be at a premium - quite a few of the delivery-
on-demand businesses in San Francisco have been running generous new user and
user referral discounts recently. It makes sense if their goal is to increase
user rolls, but I find that most of these services have limited, if any, lock-
in effects [a]. Obviously, in order to innovate on delivery-at-scale,
companies must first achieve sufficient scale to be able to prove out new
ideas. But, from my peanut gallery seat, the user acquisition strategies
appear to be driven more by the "acquire users first and monetize later"
strategy that happens when many similar VC companies are competing for the
same users. Amazon/Google/etc don't tend to get excited about acquiring you
for your user base, unless you can demonstrate high brand value or user
loyalty, which seems particularly challenging in this industry.

So, my $0.02 is simply that platformization followed by paid user acquisition
seems to be the template for this industry, and yet it does not make sense to
me.

[a] I have heard recently of a local, "last mile" food delivery start-up that
is approaching it's vendors with exclusive sales agreements. I am not sure how
effective this well be - the business from whom I heard that also found the
request completely ridiculous.

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michaelt

      Amazon’s in-house delivery initiatives have not been 
      without hiccups. [...] Perhaps Amazon could benefit from 
      the slew of startups entering the space, either through 
      acquisition, or by learning from and copying and 
      identified best practices.
    

Seems to me if you're going to acquire a company for its experience, it would
be better to acquire a company that had experience.

The startups that are legible in their 'age vs quality estimate', Kanga and
Shyp, rely on self-employed subcontractors using smart phones. Here in the UK,
delivery services like Yodel that use self-employed drivers have shitty
reputations [1]; if Amazon want to improve end-to-end customer experience, I'd
be surprised if they went down that route.

[1] [http://www.theguardian.com/money/2014/jan/10/yodel-worst-
par...](http://www.theguardian.com/money/2014/jan/10/yodel-worst-parcel-
delivery)

~~~
aardvark179
Most of my packages from Amazon over recent months have come via Amazon
Logistics. Since our office reception takes delivery I don't know if they are
using self employed drivers, but they do seem to have the notification
infrastructure right as I get an email about the package being delivered
before office reception can phone me. If they can start to narrow the
estimated delivery time down then I think they'll have really improved things.

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dorseymike
With Google Shopping Express & Instacart as well as the Postmates and
DoorDash's of the world - I keep wondering...at what scale do these become
huge businesses? Especially Instacart and GSX - they have someone go shopping
and bring stuff to my home for $4 and for free right now. I guess it's user
acquisition land grab + demand aggregation? And then they can go the route of
private labeling the best goods and ultimately own the customer and then
charge higher prices? They can't possibly make real $ at $4 per delivery, can
they?

~~~
BryanBeshore
These services charge more for the items purchased than what you would expect
if you were to purchase them at the store yourself. The $4 per delivery is
simply a facade.

~~~
zachlipton
No, they don't. Google is quite clear that its prices for Google Shopping
Express are the same as in store:
[https://support.google.com/shoppingexpress/answer/3423377?hl...](https://support.google.com/shoppingexpress/answer/3423377?hl=en)

~~~
silencio
Google Shopping Express will also use your own Costco membership to make
purchases (and I believe they do similar for other store
discounts/memberships). I just got a delivery of Frozen on bluray at the
Costco sale price of $15.99 and I get my 2% back too ;)

Kind of a shame Google won't charge more for the service. I do not want it to
go away. I would pay $30/hr and up if they also did perishables instead of
having to figure out how much more random amount I'm paying instacart or other
services. I would even use it to replace my Amazon purchases to an extent...

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spiritplumber
[https://www.youtube.com/watch?v=urs68vf7ZFY](https://www.youtube.com/watch?v=urs68vf7ZFY)
I've been doing my last-mile logistics by drone for a while, is that OK?

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bwagy
Same as supermarkets - once you own more of the wallet you'll get the margins.
They're just shifting it from the supermarket to them.. quietly.

