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Goods Delivery

Photo by Elvert Barnes on Flickr

Photo by Elvert Barnes on Flickr

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What We’re Seeing Now:

Demand for grocery and meal delivery surged as stay-at-home orders were instituted. Unsurprisingly, there was a huge spike in the number of grocery app downloads in March coinciding with the announcement of stay-at-home orders. Companies like Walmart, Target, Shipt, and Instacart all experienced record downloads—Instacart saw a 218% increase between February and mid-March and is reportedly turning a profit for the first time ever. Demand for meal delivery is up as well, and prepared meal kits—lagging before the pandemic hit—are making a comeback.  

The initial surge in demand for delivery led to longer than usual wait times. The surge in e-commerce order volumes led to reported delays in deliveries during the early days of the shutdown. Logistics companies in the United States and around the world increased delivery windows. Amazon was one of the first logistics and e-commerce companies to suspend one- and two-day delivery commitments for nonessential orders. Frustrations around delayed grocery deliveries led to online auctions of delivery slots and the creation of bots to automatically secure delivery slots and complete online grocery orders.  

Some ridehail and micromobility companies have pivoted to delivery or expanded their existing delivery businesses. With demands for rides down, some ridehail and micromobility companies have pivoted to delivery and have introduced new services. Uber recently launched Uber Direct and Uber Connect to its suite of offerings. Uber Direct offers deliveries from shops, while Uber Connect is a same-day courier service to let Uber users send items to one another. Lyft also launched a new initiative called Essential Deliveries in select cities and is having drivers on its platform pivot to delivery. Micromobility provider Gotcha introduced Gotcha TO GO. Gotcha rents sit-down scooters or e-bikes to businesses for $15/day providing them with an opportunity to do their own delivery and potentially eliminate the need for a third-party vendor.  

Workers deemed pandemic-critical—which includes delivery workers—are at a far greater risk for contracting COVID-19 than those who are primarily staying home. Important safety concerns have been raised and workers have understandably questioned whether businesses are doing enough to minimize the risks to them. Some workers have organized strikes to demand greater protections and hazard pay.  

Access to delivery and online ordering is uneven. Internet access, access to financial resources such as a debit or credit card, familiarity with the internet and apps, and comfort ordering online are all factors that can limit access to delivery. In addition, SNAP recipients can’t use their benefits to pay for delivery fees and less tech-savvy users may struggle to find available delivery windows.

Potential Long-term Issues and Questions:

With increased demand for delivery and an ongoing need to maintain physical distancing measures, the push for driverless delivery is likely to accelerate. Will companies be able to scale production up quickly enough to meet the growing demand?  

Calls to classify delivery workers as employees and provide benefits are increasing. Will we see increased protections for delivery drivers? App-based delivery platforms that classify delivery drivers as independent contractors have been facing increasing scrutiny. The City of Seattle voted in June to make hazard pay mandatory for gig workers, including grocery- and meal-delivery workers. Will other cities follow suit or will other states enact laws like California’s AB5 that classifies ridehail drivers as employees?

Prior to the pandemic, some cities were starting to experiment with curb reservation systems in order to help manage competing demands for the curb. To what extent will this increased demand for delivery be sustained, and what are the implications for curb management? Will cities need additional designated loading zones to accommodate growing demand for delivery, especially if driverless delivery vehicles become more prevalent?  

With the ongoing need for contactless delivery, parcel lockers may become increasingly popular. Several retailers and package carriers such as Amazon and UPS have been experimenting with parcel lockers that enable customers to retrieve deliveries from secure parcel lockers. Will we see more of these lockers in the public domain? If so, where should they be located?  

How sustainable are delivery apps in the long-term? Food delivery is a difficult business and many app-based services weren’t profitable before the crisis. Will businesses like Instacart that have seen record downloads since early March remain profitable after the pandemic subsides? Will consumers be willing to pay for subscription services like Amazon Prime if one- or two-day shipping cannot be guaranteed? There are also ongoing questions about the extent to which third-party platforms really help restaurants. Concerns about the commissions meal delivery apps charge restaurants have prompted some cities to enact caps.  

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What We’re Seeing Now:

Demand for grocery and meal delivery surged as stay-at-home orders were instituted. Unsurprisingly, there was a huge spike in the number of grocery app downloads in March coinciding with the announcement of stay-at-home orders. Companies like Walmart, Target, Shipt, and Instacart all experienced record downloads—Instacart saw a 218% increase between February and mid-March and is reportedly turning a profit for the first time ever. Demand for meal delivery is up as well, and prepared meal kits—lagging before the pandemic hit—are making a comeback.  

The initial surge in demand for delivery led to longer than usual wait times. The surge in e-commerce order volumes led to reported delays in deliveries during the early days of the shutdown. Logistics companies in the United States and around the world increased delivery windows. Amazon was one of the first logistics and e-commerce companies to suspend one- and two-day delivery commitments for nonessential orders. Frustrations around delayed grocery deliveries led to online auctions of delivery slots and the creation of bots to automatically secure delivery slots and complete online grocery orders.  

Some ridehail and micromobility companies have pivoted to delivery or expanded their existing delivery businesses. With demands for rides down, some ridehail and micromobility companies have pivoted to delivery and have introduced new services. Uber recently launched Uber Direct and Uber Connect to its suite of offerings. Uber Direct offers deliveries from shops, while Uber Connect is a same-day courier service to let Uber users send items to one another. Lyft also launched a new initiative called Essential Deliveries in select cities and is having drivers on its platform pivot to delivery. Micromobility provider Gotcha introduced Gotcha TO GO. Gotcha rents sit-down scooters or e-bikes to businesses for $15/day providing them with an opportunity to do their own delivery and potentially eliminate the need for a third-party vendor.  

Workers deemed pandemic-critical—which includes delivery workers—are at a far greater risk for contracting COVID-19 than those who are primarily staying home. Important safety concerns have been raised and workers have understandably questioned whether businesses are doing enough to minimize the risks to them. Some workers have organized strikes to demand greater protections and hazard pay.  

Access to delivery and online ordering is uneven. Internet access, access to financial resources such as a debit or credit card, familiarity with the internet and apps, and comfort ordering online are all factors that can limit access to delivery. In addition, SNAP recipients can’t use their benefits to pay for delivery fees and less tech-savvy users may struggle to find available delivery windows.

Potential Long-term Issues and Questions:

With increased demand for delivery and an ongoing need to maintain physical distancing measures, the push for driverless delivery is likely to accelerate. Will companies be able to scale production up quickly enough to meet the growing demand?  

Calls to classify delivery workers as employees and provide benefits are increasing. Will we see increased protections for delivery drivers? App-based delivery platforms that classify delivery drivers as independent contractors have been facing increasing scrutiny. The City of Seattle voted in June to make hazard pay mandatory for gig workers, including grocery- and meal-delivery workers. Will other cities follow suit or will other states enact laws like California’s AB5 that classifies ridehail drivers as employees?

Prior to the pandemic, some cities were starting to experiment with curb reservation systems in order to help manage competing demands for the curb. To what extent will this increased demand for delivery be sustained, and what are the implications for curb management? Will cities need additional designated loading zones to accommodate growing demand for delivery, especially if driverless delivery vehicles become more prevalent?  

With the ongoing need for contactless delivery, parcel lockers may become increasingly popular. Several retailers and package carriers such as Amazon and UPS have been experimenting with parcel lockers that enable customers to retrieve deliveries from secure parcel lockers. Will we see more of these lockers in the public domain? If so, where should they be located?  

How sustainable are delivery apps in the long-term? Food delivery is a difficult business and many app-based services weren’t profitable before the crisis. Will businesses like Instacart that have seen record downloads since early March remain profitable after the pandemic subsides? Will consumers be willing to pay for subscription services like Amazon Prime if one- or two-day shipping cannot be guaranteed? There are also ongoing questions about the extent to which third-party platforms really help restaurants. Concerns about the commissions meal delivery apps charge restaurants have prompted some cities to enact caps.  

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