As I have written on this on blog before last mile delivery operations are not very scalable and remain highly inefficient due to exogenous factors (geography, density and design constraints). Much of the recent business models have been more about cost transference propelled by low entry costs for labor participation, rather than true operational cost savings.
An economy that has grown unbelievably rapidly is the e-commerce delivery market in China. In fact, food delivery has become so central to the modern Chinese life that it has been jokingly dubbed as one of the 4 great inventions of modern Chinese civilization.
For instance, Luckin Coffee, the second biggest coffee chain in China was only founded in 2017, with 7 stores. Luckin plans to be have more retail outlets than Starbucks by the end of 2019. Luckin has expanded to 2000+ stores on the legs of its delivery business. No other product, not even pizza, exemplifies the need for exceptionally fast delivery than hot coffee. For instance, Luckin reports that a customer can order and get coffee delivered to their office within an average of 17 minutes. While coffee deliveries are offensive to the sensibilities of traditional espresso connoisseurs, the stupendous rise of Luckin provides more support to the notion that customers love ordering from the comfort of their couch and having things delivered to them.
Such rapid delivery expectations comes at systemic costs to folks involved in transporting those goods. Here is a fantastic photo essay in Washington Post by journalist Gerry Shih. The essay studies the hidden problems with fast delivery, using one of the delivery men “waimai xiaoge” as a character study to understand the “busyness” in delivery business.
The great clamor for fast delivery has been a nightmare with increases in unscheduled work, road accidents, safety issues and general loss of wellbeing.
You can hear the 10-minute story on the Washington Post Reports podcast. Skip to 10th minute to skip all impeachment news and hear this interesting vignette.