US e-commerce giant Amazon has just set up an on-demand delivery service called Amazon Flex, which will rely on freelance drivers to deliver packages to customers.
The sharing economy is no longer a secret. This new approach to business is booming. From transport (Uber, Lyft) to removals services (Lugg), renting out your apartment (Airbnb), shared WiFi access (Fon), bicycle hire (Spinlister), finding a dog-sitter (DogVacay) and obtaining help with all kinds of little domestic jobs (TaskRabbit), no sector has been left untouched by the trend. In fact this economic model is so dynamic that squabbles have arisen over what exactly to call it. Some people argue that the term ‘sharing economy’ refers only to the user experience and suggest that the expression ‘gig economy’ better suits the casual, on-demand small-task economy, as it neatly describes the experience of the workers and service providers. Companies following this model usually offer flexible working conditions, which means that people can work a few extra hours to supplement their main earnings, while this work might also be the main source of income for some. This is the approach taken by US e-commerce giant Amazon with its Amazon Flex: anyone who owns a car and an Android phone can apply to become an Amazon Flex driver and, provided that s/he passes a standard background check, will then be able to obtain remuneration from delivering packages to customers.
A flexible employment model
The Amazon Flex website underlines that its delivery people are able to work flexible hours. They can select two-, four- or eight-hour blocks of time on a given day, or designate the precise hours they are available, up to a maximum of twelve hours per day. Drivers earn between $18 and $25 per hour. The service is already up and running in Seattle, where Amazon is headquartered, and will soon be live in Manhattan, Chicago, Baltimore, Miami, Dallas, Austin, Indianapolis, Atlanta and Portland. The packages delivered by the freelance drivers have been ordered by customers via the Amazon Prime Now service, which was first launched in New York City last year. The service, which is available to Amazon Prime subscribers in around fifteen US cities, offers the option of a one-hour delivery service at a charge of $7.99, although standard customer delivery within two hours is free of charge. At the moment Amazon Flex jobs are for car drivers only but the company says it may decide to expand the service to include bike or on-foot deliveries at a later stage.
Combining personal transportation and goods delivery
Amazon is not the first company to set up a delivery system based on the gig economy. In Sweden, the MyWays delivery service developed by DHL follows a similar approach. Meanwhile Californian startup SideCar has followed a rather unique development path. It started out as a sort of 2.0 ride-sharing service, enabling people who drive to the office every day to pick up others making the same journey. However, faced with fierce competition from rivals such as Lyft and Uber, the startup has since diversified, by arranging for its drivers to also make deliveries on behalf of other companies. SideCar has for example gone into partnership with medical marijuana delivery startup Meadow to deliver prescribed pot to Meadow customers. This service has worked so well that the SideCar website now describes its business as primarily an on-demand delivery service. In an interview with American technology news website GeekWire, SideCar CEO Sunil Paul vaunted the merits of his hybrid model – i.e. transporting both people and goods. He points to three advantages of this approach. Firstly, it allows drivers to make the most of the hours when there is specific demand. Lots of people need a ride at the beginning and end of the day, but there is usually a long slack period between the two. The situation is quite the opposite for merchandise, demand for goods deliveries being mostly in the middle part of the day. The type of demand also varies according to geographical area, so a driver might take a customer from the city centre to his/her home in a residential suburb, and then pick up a package in the vicinity for delivery back to the city centre. And of course people and packages can share exactly the same ride, providing diverse means for the drivers to earn income.