Multivariate Logistics

I think it’s fair to assume at this point that on-demand is generally here to stay. Now, it’s possible and more likely probable that you’ll see a few more companies die off due to unit economics and/or over-aggressive expansion (and definitely consolidation of similar companies), but the general pattern has now been established and certainly the demand for someone else doing something for you will always be there.

As it currently stands though, full value isn’t really being met. We’re still stuck in this unitary view, a one-to-one relationship where a single user is interacting with a single service and a single deliverer of labor. (I know that last part is awkward; I don’t know how to phrase it.) This doesn’t really impact the user all that much apart from surge pricing, but it absolutely impacts the worker, as they are very inefficient relative to opportunity. Let me give you an example.

It’s an average Saturday night, and my lovely fiancee is getting cocktails with her friends. I’m staying in because Alabama/LSU is on, and because the easiest thing in the world to do is nothing. Instead of making myself dinner like a normal adult, I decide to get some Thai food. I send the order out via Postmates, it gets accepted, and the wheels turn.

Now imagine concurrently, someone in the building across the street from me puts in an order from the same restaurant. Or imagine that a worker driving for Uber has a request to take someone two blocks down the road from the Thai place into DUMBO where I live. In a perfect world, whatever dispatch logistic system the driver is using should be able to determine that and allow him or her to double down, since it’s unlikely that the passenger would be all that upset to have the delicious smell of Thai food as their traveling companion.

I assume that all of the logistics of these companies are handled internally and thus, there’s no chance for them to speak to each other. I think that’s a missed opportunity. As these companies get larger and face more competition (and as more labor enters the market), the labor is going to get squeezed as the companies either up their revenue share or decrease the fixed payments. As such, you’ve got an increasing dissatisfaction amongst the labor, which causes them to churn as making a living becomes nearly impossible. Having this multi-variate logistics – potentially served by a third-party which not only means the on-demand service doesn’t have to build/maintain it, but theoretically would increase demand – would make everyone happy.

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