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Delivery Bots Profitable, Human Couriers on Strike
6/26: Amazon and ghost kitchens take a bruising
Last week was as busy as ever, as the world of delivery rapidly resorts itself; feels like a particularly well timed moment to launch issue one of Modern Delivery, the first daily newsletter dedicated solely to the delivery industry.
Delivery Bots Self Drive to Profitability?
Labor Action Roils Delivery Industry
Chart Time | Ghost Kitchens’ Deadly Fundraising Freefall
Amazon Says Hub-ba Hub-ba to Local Delivery
ROBOTICS | Delivery Bots Tease Profitability
Delivery robotics startup Starship Technologies quietly announced it has been “profitable in select service areas for the past year.“ The news was seemingly tucked away as part of a larger announcement that the PDD leader had signed a new partnership agreement with Estonian 3PD Bolt, taking Starship out of its usual comfort zone of serving colleges and campuses.
Context: A number of PDD / delivery robot startups have now claimed the mantle of select profitability, an impressive accomplishment given the industry’s high hardware hosts. Cartken, like Starship, did so thanks to high levels of autonomy; others have reached profitability using a remote driving labor model that relies on lower costs in LatAm.
LABOR | Delivery Drivers Strike in SoCal
Labor action continues to throw a wrench in the delivery industry’s business model, with Teamsters in Palmdale going on strike this past Saturday. Local 396 unionized the drivers of Battle-Test Strategies (what a name…) - an Amazon DSP in Southern California. Beyond angling for higher pay, the union is concerned about driver safety, as temperatures in the truck can hit 100 degrees Fahrenheit in summer.
Context: This might be the first unionized Amazon DSP (delivery service partner,) but the larger delivery industry is grappling with pay and safety issues as well. UPS’ workers are authorized to strike, as the Teamsters and the parcel giant have until August 1st to settle their differences. Gig-powered delivery workforces are also trying to slow attrition and keep drivers happy, as evinced by moves like Grubhub’s driver safety upgrades in Q1.
CHART TIME | Ghost Kitchens Scared to Death?
Ghost kitchen, cloud kitchen, virtual kitchen, whatever you want to call them, the business of cooking a delivery-only brand from a more familiar operator’s kitchen is clearly suffering from indigestion. The past few weeks have seen Nextbite sold off and MrBeast bad mouth his own burger, but zoom out and it’s clear there’s a larger issue as well. In 2021 we saw operators pulling in multiple hundreds of millions in VC cash, this year startups are lucky if they can close a few million dollars in debt financing. (Don’t let the chart’s logarithmic scale fool you into thinking this isn’t a precipitous decline…)
LOGISTICS | Amazon Launches Local Business Delivery Hubs
Amazon is turning to local florists, mini-markets, dry cleaners and the like in its latest plan to expand its delivery and logistics footprint. Building off a pilot program in Alabama, Mississippi and Nebraska, Amazon is now targeting small business operators in major cities like LA, NYC and Boston. Participating businesses will deliver an average of 30 packages per day, as part of the “Amazon Hub Delivery” program, earning an estimated $2.50 per order.
Context: Amazon has been throwing a lot of concepts at the wall lately, as it tries to bring down the enormous costs of offering free delivery to ~150 million members. Recently the company’s experimented with regionalizing search results, and it bumped up the minimum grocery order that qualified for free delivery. But the Everything Store faces its most daunting challenge yet — an FTC lawsuit that it duped millions of consumers into using Prime, and made it near impossible to cancel membership.
A Few Good Links
NYC cracks down on wasteful delivery packaging. Wonder pivots further away from vehicle-based food delivery. Grubhub and Joco launch courier rest stop. Domino’s launches pinpoint delivery. Uber Eats says ciao to Italy. HungryPanda gears up sponsorship campaign.
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