The gigs of the On-demand Same Day Courier Service

Author: Priya Seoni

Another start-up model most common is the gigs of the same day courier services. Getting a one day delivery through a technology platform is a part of the on-demand economy. On-Demand Economy (ODE) is described as providing easy and convenient access to products or services to the end-user by leveraging technology. In ODE, you can book courier online and get anything picked from one place and get it delivered at another. Both courier pick up and delivery happens the same day. The delivery is done by delivery executives who are not employees of the start-up.

The structure of same-day courier service

Within the hyperlocal space, many companies have now realized that the rising millennial population needs the convenience of delivery. Millennials are the biggest chunk of on-demand economy consumers and by 2030 India’s working-age population would reach 270 million people that would be Millennials (As per McKinsey). As a result, companies that offer courier pick up and delivery services these days follow a revised structure.

Previous Structure before on-demand delivery services:

Hypothetical situation:

A customer wants to send an important document within the same city.

Step 1: The customer would visit the courier company, handover the document.

Step 2: Courier company hands over a receiving of the package.

Step 3: All packages received during the day by the courier company are segregated as per location and then locality.

Step 4: The courier for a particular location is consolidated at a hub and from there the delivery executives take the package out for delivery.

Step 5: The package is delivered and handed over to the recipient.

Challenges:

  1. No option to book courier online
  2. No online courier service means no option to track the package online
  3. Even within city packages, it was taking more than one day delivery

Then came On-demand same day delivery services

The new structure as per the old hypothetical situation:

The customer wants to send an important document within the same city.

Step 1: Customer will log on to an app and book courier online.

Step 2: The customer mentions the address for courier pickup from home and enters the delivery address.

Step 3: On-demand delivery and courier services will get the package picked the same day.

Step 3: The package is delivered the same day, instantly.

Step 4: On app-based services like Pidge, the customer can track the package out for delivery on a live map.

Step 5: The status all the way is updated on the app as well as through notifications.

The benefits

  1. Package booking is convenient.
  2. Customer saves time by using online courier service to book the delivery.
  3. The customer is updated on all the steps through a live map on the app.
  4. Less time is taken for delivery, one day delivery within the city.

The most important role is played by the delivery executives in this structure. For any on-demand company providing same day courier pick up with instant delivery, the most critical is the timelines of the delivery that are in the hands of the delivery executives. More than 280 companies now provide on-demand goods and services across 16 industries, which were 76 in 2014. Out of these companies that provide same day delivery, they may not follow the same delivery channel.

Many companies follow the gig model to meet the timelines. They hire freelance drivers or contractual drivers who log in to their platform and get the job assigned to make the deliveries in their location. The entire exercise saves the company’s time and money. They do not have to hire a full time paid an employee to do the job.

The term used for these resources is "gigs".

Wikipedia definition of temporary work or gigs is:

Temporary work or temporary employment (also called odd jobs or gigs) refers to an employment situation where the working arrangement is limited to a certain time, based on the needs of the employing organization. Temporary employees are sometimes called "contractual", "seasonal", "interim", "casual staff", "outsourcing", "freelance"; or the words may be shortened to "temps". According to McKinsey by the year 2025, the gig economy can inject in the global economy $1.3 Company trillion per year.

How does "gig" work?

The on-demand companies providing delivery services create online platforms.

These platforms connect customers and delivery executives.

Payment is made to these executives as per the deliveries made while they were logged in to service.

The structure for the gig is:

The on-demand online courier services operate the gig through a software interface.

Consumers and freelancers/contractual workers connect through the interface.

The freelancers or contractual workers register themselves on this interface.

When the consumer puts a request on the app, as per their location the nearest logged in gig worker is assigned the order.

The consumer gets the information when the order is assigned.

After the order is fulfilled the consumer rates the gig worker.

Based on the orders fulfilled the gig worker is paid per order/ride at the end of the month.

Who can be a gig worker?

Anyone who has a smartphone and internet connection can register with the on-demand economy online workforce.

Challenges

For the workers:

  1. No paid sick leaves
  2. No overtime
  3. No minimum wage
  4. No access to employment insurance
  5. No grooming or training
  6. No skill enhancement initiatives by the employer
  7. No PF or any other benefits

For the employer:

The above are the benefits for the employers for hiring workers at a lesser cost and responsibility but the same leads to affecting the brand reliability as there is no accountability.

Future of Same day delivery services with the Gigs

As per Noble house report – "International workforce trends point out that 50% of us will be a part of the gig economy by 2020, either as providers or as consumers." The impact of the change may be seen on many start-ups. Though the gig economy offers flexibility and freedom to the worker and lower cost to employers, however, the downside is much higher than the upside. In case of a complaint about the delay in courier pickup from home the gig workers do not take responsibility though they are the face of the company. However, it does affect the brand image of the company. Om-Demand start-up professional courier services like Pidge have already denied compromising quality with cost. They hire full-time employees as delivery executives and train them to improve customer experience through excellent service.