Can an Employee Business Model Create Sustainable Delivery Services?

 

Deliveroo, an Amazon-backed gig platform, launched its IPO and is digging for billions. With significant funding from Fidelity, Amazon, Capital Partners, and others, the question stands: is there the need for a reimagination of the business model for sustainable delivery services?

EntreCourier Founder Ron Walter joined MarketScale TV Host Hilary Kennedy to discuss what has and hasn’t worked so far, in addition to what might work in the future. EntreCourier helps independent contractors and “…exists to provide the tools and information that you can use to profitably and successfully run your delivery business. Our goal is to help you think like a business owner.”

Some delivery services don’t call themselves delivery services. UberEats and GrubHub often refer to themselves as “tech” companies.

“That’s all about employment versus independent contractors,” Walter said. The issue stems from the hiring process of signing on independent contractors, he elaborated. According to Walter, these delivery companies refer to themselves as tech companies to say the delivery drivers aren’t doing the core work of the business.

But, this doesn’t seem to always work.

“The current model of delivery services is so inefficient,” Walter said. “I’ve had times where I’ve gone to pick up at a restaurant, and I’ve got the name, and they’ll say ‘I’ve got two orders with the same name,’ and right away someone else comes in with that name.”

The two delivery drivers will end in a situation where they’re picking up two separate orders going to the same place, he elaborated. Walter welcomes Deliveroo coming to the U.S. market, as it provides another option. A company that would have a different logistical approach would offer a new angle.

“If you’ve got an employee model, you can move the pieces around much more efficiently,” Walter said.

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