Uber will acquire San Francisco-based food delivery company Postmates for approximately USD $2.65 billion (AUD $3.79b) in a bid to accelerate a path to profitability.
Transport and delivery workers in the gig economy are paid less, work more hours unpaid and are less satisfied than other workers, a major survey has revealed. Read more
Deliveroo has announced that Amazon is leading a new $575MM Series G shared funding round. This will make Amazon the largest investor in this round.
Amazon joins existing investors T Rowe Price, Fidelity Management and Research Company, and Greenoaks.
According to the company, this series of funding will bring customers the food they want whenever and wherever they want it, offering even more work for riders, and helping restaurants to grow their businesses by reaching new customers.
“Amazon has been an inspiration to me personally and to the company, and we look forward to working with such a customer-obsessed organisation. This is great news for the tech and restaurant sectors, and it will help to create jobs in all of the countries in which we operate,” Will Shu, founder and CEO of Deliveroo said.
“We’re impressed with Deliveroo’s approach, and their dedication to providing customers with an ever increasing selection of great restaurants along with convenient delivery options. Will and his team have built an innovative technology and service, and we’re excited to see what they do next,” Doug Gurr, Country Manager, Amazon UK said.
The new investment will contribute to:
- Growing Deliveroo’s engineering team based in its London headquarters
- Expanding Deliveroo’s delivery reach in order to continue offering its service to new customers
- New innovations in the food sector, for example through delivery-only super kitchens “Editions”, as well as new formats that will help restaurants expand to new areas at a lower cost and lower risk, bringing more choice to local neighbourhood
- Increased support for restaurant partners, and new tools to offer riders flexible and well-paid work
Read more about Deliveroo in Australia here.
SAP and Uber Freight have announced a partnership to modernise the freight industry through intelligent process automation and better access to a network of connected and reliable drivers.
The integration of Uber Freight into SAP Logistics Business Network will let customers access rates from Uber’s digitally activated carrier network and gain real-time quotes and guaranteed freight capacity, greatly simplifying load management and execution.
“Finding and booking freight can be the most expensive and often the most complex piece of the supply chain,” said president of SAP Digital Supply Chain Hala Zeine. “This combination will remove roadblocks and offer a simpler, more automated approach that streamlines operations, delivers tangible cost savings and ultimately creates a better customer experience. Adding Uber Freight to our SAP Logistics Business Network will help our customers optimise their logistics and put their customers at the heart of their digital supply chain.”
SAP Logistics Business Network, built on SAP Cloud Platform and the SAP HANA business data platform, expands transportation management to enable shippers, freight forwarders, carriers and other logistics partners to easily onboard, collaborate, exchange logistics information and share insights. With this Uber Freight integration, shippers and carriers can work together using tools that bypass traditional roadblocks, enabling shippers to select from a much broader carrier base and perform real-time pricing of shipments, while gaining improved utilisation and efficiency.
“For the world’s biggest shippers, an efficient, digitalised supply chain is critical to their success,” said senior director at Uber Freight Bill Driegert. “Uber Freight is partnering with SAP to bring shippers and carriers together at the level where freight decisions are made. This tech-forward approach to freight means shippers can spend less time sourcing quotes and capacity and more time getting goods to market.”
The value of a networked approach
With this partnership, SAP and Uber Freight will work to connect both sides of the freight marketplace, increasing visibility and transparency for all players. These efforts will support easier and faster decision-making based on real-time pricing for shippers and carriers, empowering organisations to maximise daily work time and make more informed decisions about their operations.
At a recent logistics roundtable discussion, Louise Robertson from Australian last-mile solutions provider Localz declared that tech in the logistics industry’s should be more like Tinder. Logistics & Materials Handling finds out why.
Consumer behaviour is changing drastically. The taxi and hotel industry, the music industry and the media industry have all experienced significant disruption through digital concepts and have had to adapt accordingly.
One particular industry that has seen disruption on a large-scale is the dating industry, namely through Tinder, one of the world’s most popular apps for meeting new people. Tinder has been ranked by Apple as the most downloaded lifestyle app in America for nearly two years. According to data released by Tinder, 15 per cent of the population are using the app, equating to more than 3.5 million people.
Launched in 2012, Tinder is a free app and works by users swiping right if they like the look of someone, or swiping left to pass. The app uses a double-opt in method, only allowing two users to chat online when they mutually match. Tinder has made over 1 billion matches to date and more than 26 million matches take place on the app every day, according to data revealed by the company.
Louise Robertson, Chief Marketing Officer at Localz – a global last-mile solution specialist – thinks that the logistics industry needs to be more like Tinder. “Modern consumers are well informed. They are more engaged, connected and educated than ever before and carry real-time information with them in their pockets.”
The popularity of Tinder, and other similar apps, is largely attributed to its ease of use and simple mechanism. It’s a simple concept, with an intuitive menu and convenience that allows to users to access on the go.
The individual economy
According to Tim Andrew, Co-Founder and CEO of Localz, the changing behaviour of the consumer is presenting the logistics industry with a number of challenges.
“The on-demand economy is interpreted by most people as instant fulfilment. It’s all about what I want, when I want and how I want. That heightened consumer expectation and demand of being able to dictate the hour at which a delivery will turn up, we call the individual economy or Iconomy,” Tim says.
We now live in a connected digital age that redefines the way we live, the way we connect with each other and the way we consume. This has allowed an app like Tinder to change the norms around how people date and meet potential romantic interests. This same change in consumer mindset has increased the delivery expectations of consumers and placed increase pressure on logistics companies and retailers, Tim says.
Recent research carried out by Localz revealed that 94 per cent of consumers would choose a different shop or brand based on delivery or collection options alone. The researchers found that customers want to define the time and place that their delivery or service will occur and at a very minimum know when their delivery or service is coming. They also want to be able to change those details to suit their needs.
According to Tim, companies must offer flexible delivery services that are relevant to their customers, as individuals with specific needs, or they are at risk of seeing customer move their loyalties. “This is the behaviour of the individual economy,” Tim says.
The irrational, emotional, uneconomic consumer
Localz recently organised a roundtable event in Melbourne. The event was an opportunity to exchange ideas and information among executives and representatives from associations and local government on the challenges currently being faced by the retail and logistics industry. With a particular focus on meeting the demands of consumers who are irrational, emotion and uneconomic – but in control.
“Aussie retailers are under increased pressure to let go of the old processes, operations and logical order that optimise their efficiencies to deliver these discerning consumers,” Louise says.
James Westlake, Chief Revenue Officer at Localz, presented on the importance of data in providing the modern consumer with what they want. “You can always serve your customer better if you know them. We have had an explosion in the ability to collect data. But in Australia we are a bit behind. Often on an order there is no email, no phone number, no ID etc. If you compare this to a logistics provider in the EU, they wouldn’t touch without this kind of data,” James says.
The importance of data was echoed around the room, regardless of sector or role. Jonathan Reeve, E-commerce Fulfilment Consultant, said that it’s not that consumer motivation has changed. For him, people are still motivated by tangible things like convenience. “We’re motivated by a mix of tangible things, like convenience, and psychological and social aspects. All of these have remained largely the same over the years. It’s the context that has changed, we now have so much choice. The array of choices is now enormous for a consumer, that’s the big difference,” Jonathan says.
Jonathan attributes much of the success of Amazon to its ability to offer cheap and convenient delivery. He elaborates and argues that where Amazon already operates almost everyone has an amazon success story to share – and the hero of the story is the delivery experience. Having the ability to offer same day or, at the least, next day deliver is what has given Amazon the competitive edge, Jonathan says. According to him, it is the company’s collection of consumers’ data that will take Amazon’s success to the next level.
“The more data you have, the better you can run your supply chain. Humans are largely habitual, often ordering the same things in a cycle. If you look at Amazon, it is likely that in the future customers will receive deliveries containing products that Amazon predicts they will need, based on the data it has about their usage and past purchases. And if they get it wrong, there will be a box to send back what you don’t need,” Jonathan says.
The future of the high street
As consumers move more towards online shopping and digital-only outlets, Jonathan believes the high street has to adapt. “High street stores will have to change, but the retailers that give the customer every option are going to be the performers,” Jonathan says.
The omni-channel shopping experience changed everything – people want the same seamless service and experience that they have online, instore, Jonathan says. “This will have an impact on the physical store and tech can benefit the high street experience too. People need a reason to come to the store, it needs to become more of an experience than just buying something that could easily be ordered from home. Only 10 per cent of purchases are made online, that still leaves 90 per cent of purchases in Australia as face-to-face,” he says.
Jonathan believes that if businesses are timely and relevant in their communications and offers, consumers will be less cautious about data and start to volunteer information. He thinks that with this, retailers will be able to do more with the data and create a more competitive product.
Enticing the customers instore also presents benefits for the retailer, so long as the consumer has a good experience. Localz research found that 69 per cent of customers who collect a delivery in-store are likely to make an additional purchase when collecting that item. Retailers with brick and mortar stores are able to provide a mixed channel experience that increases their sales.
Why “Sorry, we missed you.” isn’t good enough
When asked what customers found the most frustrating about their recent delivery experiences, the Localz survey results revealed that 40 per cent rated receiving a “we missed you” card as the most annoying.
Getting delivery right the first time is not just good for the customer, but also cheaper for the logistics provider. “Increased first time delivery rates reduces the cost of delivering, so it doesn’t just have benefits for the consumer,” Louise says.
The second most annoying aspect for survey respondents was having no visibility of when the delivery was arriving. “It’s clear that control of when something gets delivered and visibility of what is happening through that process is key in logistics,” James says.
According to James, this has led to an increase in customers demanding ever smaller delivery windows. “When asked what was considered a reasonable delivery window, 30 per cent stated one hour and 47 per cent stated two hours. That’s 77 per cent of people believing an acceptable delivery window is under two hours or less. That’s a big challenge for logistics.”
In addition, receiving an accurate and up-to-date estimated time of arrival was stated as being very important to 47 per cent of customers and important to 36 per cent of customers. Much like Tinder, having information about potential love interests in real-time at the touch of a button is what many users like about the app.
The ability to communicate with a driver was less important than receiving an accurate estimated time of arrival, supporting the idea that many consumers are happy to manage their purchases online via a smart phone or PC, rather than an in-person service.
“There are clearly some challenges for retailers and delivery providers to meet the expectations of the on-demand consumer,” James says.
“Customers want simple, fast delivery with short delivery windows and transparency of what is happening through the process. They are also saying that the cost of delivery and collection services is still very important to their purchase decision. Reducing the cost of collection and delivery services, while still maintaining a high-quality service, is key to success for retailers and delivery providers.”
Australia Post recently announced it wants to use Uber-style tracking for parcels. It’s an interesting and possibly courageous move because there are few similarities between parcel delivery and ride sharing services.
But the development raises some interesting key question for logistics divisions, such as: how would our business look with Uber-style tracking? Will more transparency make us look good to our customers, or make us look silly?
Parcel tracking does not offer the same near-instant gratification available to Uber’s ride-sharing customers. When Uber customers place a request, they are quickly alerted to a nearby Uber vehicle and can watch its progress to the customer’s address. In urban areas this procedure takes only minutes. Can a parcel delivery provide such an instant response?
Consider the risks if parcel delivery customers are paying attention and seeing their parcel taking the ‘scenic route’ to the destination, parked for an inordinate period, or constantly dropping back to the depot. Greater scrutiny has potential to backfire on inefficient companies.
We know from experience that even experienced logistics divisions, which consider themselves efficient, are often shocked by what is revealed under technology’s cold gaze. They may find systems that are sound in principle, fall down in practice: this may include obvious issues such as poor communications across the business, drivers doubling up on delivery routes, or drivers backtracking due to overlooked or misplaced items. No doubt Australia Post is working hard to ensure systems and processes stack up to this increased scrutiny.
“Technology can improve efficiency in any-sized delivery transport division – but only if you continue to monitor and nurture it.”
But the benefits from increased transparency easily outweigh the risks. I know auto parts companies with small delivery fleets that use telematics to provide their customers with total transparency – essentially already using Uber-style tracking. Some of these fleets may only have three or four vehicles and use the technology to gain a competitive edge on the big guys. Their customers love this transparency, and the technology has helped make the business better.
Efficiency in delivery fleets cannot be understated, with both B2B and B2C businesses currently engaged in a ‘logistics arms race’ of ever-shorter delivery times – for example, retailer Cue recently launched a three-hour delivery service throughout Australia; the Iconic also offers three-hour deliveries for Sydney and same-day to Melbourne metro; JB Hi-Fi and Harvey Norman offer same-day delivery; and Amazon offers one-day deliveries.
We’re also seeing tighter delivery times in B2B industries such as auto parts, catering, building materials and other sectors where there are opportunities to improve
Those who are less efficient will be left behind. Yet there is evidence many fleets are lagging on efficiency by not properly engaging with technology: Teletrac Navman research on its UK operations showed 27% of fleet organisations are interacting with the telematics technology on a daily basis – not bad, but doesn’t this also suggest 73% of organisations aren’t so attentive? A 2015 ACA Research survey showed that while most large fleets use telematics, the take-up falls dramatically for fleets between six and 25 vehicles (49 per cent), and for fleets with less than six trucks the take-up was just 18 per cent.
Technology can improve efficiency in any-sized delivery transport division – but only if you continue to monitor and nurture it.
Consider how technology is used for vehicle maintenance. In the past, logistics firms would act on maintenance when a vehicle broke down. Now, technology allows us to be proactive rather than reactive by tracking vehicles and anticipating maintenance schedules with greater accuracy. The same proactive approach can apply throughout logistics, not just maintenance.
Currently, too many delivery fleets treat their telematics systems like a gym membership – they sign up with great enthusiasm only to drop off three months’ later, as interest wanes. Maybe the return on investment is not immediately apparent, or maybe they find it difficult to keep up with the data produced. Technology’s many benefits are often found beyond the bottom line: customer service may not immediately show up as a ROI, yet may foster greater customer loyalty.
Technology should improve delivery times but also lead to increased professionalism, and more accuracy in delivering items in full, undamaged and on time. These may take time to track as a measurable ROI.
Responsive and efficient logistics businesses understand telematics and related technologies are what you make them. Those prepared to put in the effort and focus on efficiency – often on a daily basis – will shine under greater scrutiny, impress their customers and remain competitive.
Walter Scremin is general manager of Ontime Delivery Solutions, developer of Ontime Earth. For more information visit www.ontimegroup.com.au.
A new online platform called uTenant offers a cost-effective alternative to commercial agents for Australia’s freight, logistics and warehousing industry – drawing comparisons to services such as Uber and Airbnb.
“uTenant is intended to disrupt the commercial leasing industry like Uber has for taxis and Airbnb has for holiday accommodation. For tenants, the web-based portal will curate a list of available properties based on their specific size, location and preferred term of lease amongst other things, and connect them with landlords to arrange inspections, negotiate terms and sign a lease,” explains uTenant founder and director, Matt Sampson.
uTenant is an online commercial property portal that streamlines finding, inspecting and leasing warehouse space for tenants, whilst amplifying property visibility for landlords, helping them to source tenants and lease space cheaper and faster.
The brainchild of entrepreneur and former commercial leasing agent Matt Sampson, uTenant puts tenants and landlords in direct contact and provides a confidential, transparent, cost- and time-effective alternative to the old way of leasing space.
“With uTenant, we have reimagined how industrial warehouse space is leased, providing significant advantages and savings for the two most important parties to the transaction – the tenant and the landlord,” says Sampson.
How uTenant works
- Tenants enter their specific requirements into the uTenant portal
- uTenant curates a tailored list of suitable properties, which have already been validated as legitimate
- Tenants shortlist preferred properties and arranges inspections directly with the landlord or through uTenant
- Inspections take place and direct tenant-landlord negotiations commence
- On conclusion of a lease, standard fee payable to uTenant by landlord, with uTenant sharing a percentage of this with the tenant (fee sharing n/a in NSW)
In the US, automotive manufacturer Toyota Motor Corporation (TMC) has announced the launch of a new alliance focused on developing autonomous electric vehicles for parcel delivery, ride sharing, on-the-road e-commerce and more.
The alliance already has the support of US-based e-commerce company Amazon, ride-share companies DiDi and Uber, automotive manufacturer Mazda, and restaurant chain Pizza Hut.
Together, they will reportedly collaborate on vehicle planning, application concepts and vehicle verification activities.
Akio Toyoda, President, TMC, revealed that the new e-Palette alliance will leverage Toyota’s Mobility Services Platform (MSPF) to develop a suite of connected mobility solutions and a flexible, purpose-built vehicle.
“The automobile industry is clearly amidst its most dramatic period of change as technologies like electrification, connected and automated driving are making significant progress,” said Toyoda. “Toyota remains committed to making ever better cars. Just as important, we are developing mobility solutions to help everyone enjoy their lives, and we are doing our part to create an ever-better society for the next 100 years and beyond.
“This announcement marks a major step forward in our evolution towards sustainable mobility, demonstrating our continued expansion beyond traditional cars and trucks to the creation of new values including services for customers.”
In the near term, the Alliance will focus on the development of the new e-Palette Concept Vehicle, also unveiled at CES by Toyoda. It is a fully automated, “next generation–battery” electric vehicle (BEV) designed to be scalable and customisable.
Toyota plans to conduct feasibility testing of the e-Palette Concept in various regions, including the US, in the early 2020s, and hopes to have the vehicle on location at the Olympic and Paralympic Games in Tokyo in 2020.
Australian courier service Zoom2U has acquired Freight Match, an Australia-wide online service that matches transport operators with customers wanting to move goods.
Through the new addition, Zoom2U customers will have an alternative delivery option for interstate shipping, employing road freight carriers and air freight operators to deliver larger items such as pallets, building materials and shipping containers.
For interstate deliveries, goods can essentially ‘hitch a ride’ with vehicles that are already traveling to the required destination.
Steve Orenstein, CEO, Zoom2U, said the Freight Match acquisition would enable the company to apply the same online booking and smart delivery tracking features introduced with Zoom2U to the freight delivery industry.
“Much like courier delivery, freight transportation is an area that can be optimised significantly,” he said. “The problem is that existing services use the same technology systems that were used ten years ago, making delivery jobs unnecessarily complicated.
“Bringing Freight Match into the fold gives us an opportunity to upgrade its capabilities and offer a much better experience for customers. The reality is that Australians have become used to tracking their taxis and food on a map in real-time, and there’s no reason why they can’t do the same for package deliveries.”
Freight Match has a network of more than 2,000 transport operators in Australia, offering them a consistent source of new income by tapping into spare capacity without having to chase clients or fuss around with paperwork and payments.
Zoom2U recently celebrated its third year of operation in Australia, in which time it has secured major deals with DHL and Big Commerce, and gone from 250 parcel deliveries a day to more than 35,000 a month. It now has a network of more than 500 couriers around the country, and has raised $3 million in funding to date.
“Zoom2U has carved out a sizeable niche in Australia for customers who need a reliable courier for VIP, three-hour, same-day or after-hour service,” said Orenstein.
“We’ve had customers use Zoom2U for everything from getting spare keys sent over when they’ve locked themselves out of the house to express couriering a forgotten passport to the airport.
“With the impending local launch of Amazon, online retailers need to be looking at how they can overhaul their delivery infrastructure to match Amazon’s immediacy and breadth of shipping options. The recent acquisition of Freight Match means Zoom2U is well-placed to become the alternative delivery system of choice in Australia.”
Sydney company FreightExchange is looking to take its online freight capacity marketplace overseas, with support from the NSW Government.
John Barilaro, Deputy Premier and Minister for Regional NSW, Small Business and Skills, said the company, which received a $98,000 Building Partnerships Grant from the private sector–led, NSW government–backed ‘Jobs for NSW’ program, had grown 587 per cent in 2015/16, with revenue of more than $1 million and over 800 carriers and 1,700 shippers on its books.
“FreightExchange is a great example of a clever company developing technology to make NSW more efficient while creating jobs and growing the economy,” said Barilaro.
“Former management consultant and FreightExchange founder and CEO Cate Hull saw the massive amount of under-utilised capacity of trucks on Australian roads and she knew she was on to something.
“This smart online platform uses GPS tracking to take advantage of unused capacity on long-haul freight by connecting shippers with carriers and allowing them to instantly book their freight, get a price and get it moving.
“The company, which now has 12 staff and focuses on long-haul trucking, has developed apps which allow companies big and small to plug directly into the system to match unused capacity with freight orders instantly.
“After building the company from scratch, Cate is now hoping to take the company global, with a pilot set for New Zealand this month and plans to expand to Shenzhen, Singapore and Hong Kong,” Barilaro added.
Hull said the Jobs for NSW Building Partnerships grant had been a huge help in growing the business.
“To big businesses it might sound like a small amount but to us it was significant,” she said.
“We used the Jobs for NSW grant to build the product, but also to deal with the growing pains of a small company – the team has close to doubled in the past year.
“The more we can drive efficiency the better it is for NSW. The dream is to create a platform that in future orchestrates self-driving trucks and automates the buying of selling and freight capacity internationally – a global platform,” Hull said.