Delivery Bicycle Rider
News/Analysis

Delivery Fail: The Problem with a Gig Economy

What do you think a delivery company like Deliveroo, Just Eat or uberEATS should be good at?

That’s right – delivery.

In my personal experience (outside of London), this – sadly – does not hold true with high enough certainty. I can’t speak for UberEATS as I have no direct experience of their service outside of London, but both Delieroo and Just Eat suffer from the same issue – ‘not enough drivers’ to quote their system.

Tip of the Iceberg

The problem actually runs much deeper than simply one of having enough drivers; it’s about how those resources are deployed.

In the early days, the fleet of riders were employees with strict rules about how they operated and how they responded to pickups. Food was collected, even if riders had to wait for it to be prepared – they had to. Jobs could not be cancelled and delivery was paramount. It looked like these new players understood the importance of logistics when operating a delivery company.

However, these strict performance criteria were ruled to imply a form of employer-employee relationship which the companies wanted to avoid as it could cost them a lot of money. Their solution? Remove the restrictions from the contracts so that it was very clear that the riders were self-employed.

Gaming the System

As a consequence of this, the fleet of riders on whom the whole system is dependent are more-or-less free to do what they want. Human nature prevails and the system is gamed for maximum profit by the riders.

In smaller regions outside of London, riders quickly work out where the ‘hot’ sites are: food outlets that produce food quickly and in high volumes with short delivery distances meaning that a rider can quickly rack up a large number of jobs (they are paid per drop) and so earn good money. When a job comes through that is a bit farther away, or might slow down their earning potential, they reject it meaning that some restaurants may find themselves with food ready to go, a complete absence of drivers and an unhappy customer.

Who loses here? The restaurant, because the customer cannot rely on food being delivered from there and so doesn’t order again, even though the fault lies with the delivery company. The customer will still use the delivery company but just buy from somewhere else.

This may only hold true at certain times (for example later orders after 9.30pm when the emphasis shifts to fast-food restaurants, away from finer food outlets – i.e. the ‘hot’ spots move) but the experience is marred and your restaurant may lose a customer to a ‘fast food’ outlet.

Excuses, Excuses

We have seen this happen more regularly than it should. If an order comes through to our Weybridge restaurant for a pick-up after 9.30pm, there’s a high chance that it won’t get picked up at all. Sometimes, the delivery company admits they have no drivers in the area, but we’re usually fobbed off with the routine excuse of “please keep the food warm and a driver will be allocated as soon as one becomes available.” When you get an order at lunchtime it’s 50/50 if it gets picked up for the same reason – it’s quiet and drivers don’t want to work for 4 hours and only earn 1-2 jobs.

There is also a darker side to this delivery shenanigans.

We have caught the delivery company telling the customer that the driver arrived at the restaurant but the food wasn’t ready, so they left (we know this because the customers told us). The delivery company deliberately blames the restaurant and damages their reputation when the reality is that the food is ready and there were no drivers to collect it. I have personally delivered food on such occasions but received no compensation for this and still have to pay my full commission for the privilege of receiving the order, dealing with an angry customer on behalf of the delivery company, and volunteering my own goodwill to mitigate the situation.

Is there a solution?

In London, we used Stuart to provide our own contracted food courier service. When a delivery order came through on our direct ordering app, we booked a rider using the Stuart app. Over time, as Stuart grew and grew, we noticed that we had similar problems with Stuart as we had had with Deliveroo (and now Just Eat) outside London. Drivers just disappeared at certain times, although this was sometimes for different reasons in London – often ‘bad weather’ meant that the whole fleet was suspended for rider safety part-way through the evening.

Last year we found a new company called Orkestro who operate as a ‘courier aggregator.’ They link into multiple courier fleets to ensure you have a backup if one goes down or a driver drops out for some reason. This gives you a higher degree of certainty that your food will be collected. This model could have greater yields in more outlying areas where companies like Deliveroo and Just Eat seem to struggle with delivery. Riders could contract to the umbrella fleet and be booked in and out of jobs by all the delivery companies. This would increase job (gig) volumes for the riders as they work for multiple companies, food would get delivered as there is a diverse pool of drivers available, and customers would be happier as food gets delivered when it’s expected.

We have not tried Orkestro yet because the interface for booking jobs is not easy to use. A computer is required because you have to use a feature-rich control panel to complete and book job details. It felt very old fashioned because we are used to sophisticated user interfaces with such apps as UBER et al. Also, there is no API for smaller eCommerce systems such as our online ordering platform, so we couldn’t automatically book drivers when an order was placed and somebody in the restaurant has to get to a computer and spend 5 minutes booking a job (which is 5 minutes you don’t have when you’re busy in a restaurant). With more investment into app-centric user models, I think Orkestro (et al) could prove a winner in more remote areas to ensure consistent delivery.

What’s your take-away?

Thanks for reading this article about the restaurant business. I hope you liked it! If there is anything you'd like me to discuss or write about just let me know in the comments or via the contact form.