Drivers and bike riders are already using their own vehicles to make extra cash by dropping off goods and purchases to customers’ homes. While in many countries crowdsourced and on-demand delivery is still largely focused on dining and takeout food, with companies such as Deliveroo in the U.K. recruiting armies of delivery drivers, in the U.S. Amazon, Postmates and others are paying the public to deliver goods in their local areas. Meanwhile, ride-sharing apps from BlaBlaCar, Uber and others are entering the delivery area.
Sharing economy platforms are making significant inroads into logistics. Some 41 percent of consumers in the U.S. have used same-day, expedited, or on-demand delivery services. Established logistics players need to respond to shifting consumer preferences and capture opportunities created by the sharing economy.
As Ben Gesing, Project Manager, DHL Trend Research, says: “The logistics industry has a huge opportunity to support and help the sharing economy. We’ve seen a massive drop in transaction costs with the progression of mobile technology, but a hike in transportation costs of goods as they get purchased and shared many times over. Logistics can play a huge role in reducing the transportation costs and friction consumers face when shipping goods.”
The report examines the technological and social drivers of the sharing economy. It points out that until recently, businesses tended to run on linear logic. As Gesing puts it: “Manufacturers manufactured, distributors distributed and customers purchased goods and owned them for their useful life.” That consumption model is shifting to a situation where consumers are looking to have temporary access to goods rather than full ownership.
This is fueled by the new breed of digitally native companies that sit on top of the vast supply systems and make use of the digital user interface – predominantly on mobile devices – to help customers access goods and services.
The report points out that there has always been sharing – from lending friends records and books to borrowing the neighbor’s lawnmower. But with smartphones and the web, sharing can occur on a global scale with people you have never met before, rather than being limited to direct social networks in dense communities.
Many different technologies have driven this new economic model, such as mobile apps, digital payment, communications infrastructure, location services, GPS and soon the internet of things, driverless cars and better connected infrastructure. These transformative technologies began to appear just as the world entered the 2008 global recession and people were looking for ways of “sweating” their own assets and making some extra cash. That gave a huge boost to the likes of Airbnb (founded weeks before the financial crash occurred), Etsy and other sharing economy companies. But the trend has outlasted the recession and established a new way of doing business.
This represents a profound change, as Gesing explains. “If you look at things that define sharing economy companies, they are network based. Traditional businesses are asset heavy – they own physical hotels, they own machinery, trucks, and cars. Sharing economy businesses are asset light. They make it easier for people’s existing stuff to be found by others. They typically only own the mobile and web user interface and are organizationally focused on the customer experience.”
This new approach also redefines employment. The existing model has fixed labor costs with low-wage workers, specifically in logistics. In sharing economy companies such as Postmates or Shift, workers tend to be very technology oriented, are supplemented by a flexible, on-demand army of ordinary people doing the deliveries at any time of their choosing.
Businesses can take advantage of the opportunity that contingent labor can offer. Crowdsourced and on-demand labor can allow companies a staffing hedge against demand spikes and seasonality. For employees in both low- and high-skilled jobs, sharing platforms such as UpWork or Jodoh make it easier to find supplementary or even primary on-demand or project-based employment.