Rise in the hiring of temps or gigs for meeting fast demands of the online courier services

Thousands migrate every month from small towns to join the big city gigs. 560,600 people joined the gig economy in Delhi itself (From October 2018 to March 2019). Thanks to rising online courier services. An ad for hiring delivery executives stated- required bike riders for an eCommerce platform, qualification required was the 10th pass for a courier pick up and drop. In return of Rs 15000 – Rs22000 they were offering flexibility which means they will not be full-time employees but working to get deliveries done in a specific time. All they need is a valid driving license, a smartphone, and an internet connection and they are good to make the company the “fastest courier service in Delhi”. 

With the rapidly increasing growth in internet and technology, everyone has an equal playing field; it is especially the logistics of delivery solely the same day delivery that proves to be the deciding factor in the growth. 63% of consumers order online because they find retail stores as crowded as public transport is during rush hour (Capgemini). Many on-demand companies have started hiring temporary workers to be able to meet the high demand for delivering in the shortest time. These are called gig workers. As per Wikipedia, gig refers to “an employment situation where the working arrangement is limited to a certain period of time-based on the needs of the employing organization.”

For the companies, not only it is the fastest way to make maximum one day delivery but also profitable for the courier companies. They do not have to provide any full-time employee benefits like - paid sick leaves, PF (provident fund), gratuity or health insurance; to these temps. Not only are they saving cost on benefits but also their incentive models, through which they pay the riders, are based on how many trips or deliveries they make in the given time. Like one of the same day courier service’s weekly incentive model states riders can earn Rs2000 if they make 60 trips to make same day delivery. Instead of paying for availability, they are actually paying for fulfillment. 

The absence of a steady and secure income with the increasing expenses to run their own vehicle can put pressure to overwork that can also put the health of the riders in jeopardy. To earn more the riders work for 12hours a day, such a system is beginning to affect the health of the riders. And if they fall sick they will not be paid, unlike the full-time employees who get sick leaves. 

Managing expenses is not also the same day courier service’s headache. The expenses of running their own vehicle – loan and petrol, paying rent for the house and bike/car servicing in case of an accident all has to be borne by the rider. All this has to be paid from the same money the rider is making to make one day delivery. 

With so much at stake, why would anyone join the gig workforce?

The answer is every year 17 million join the workforce whereas the jobs created every year are only 5.5 million. At 6.1% unemployment is at a 45 year high among the urban youth (Periodic Labour Force Survey). The consumption has come down and the industrial growth is flatlined. In such scarcity, the growing the app-based economy and the online courier services have become the largest sources of employment.

But with the increased competition the incentive pay-outs will keep falling and people would keep shifting from one company to another. What happens then? The gig model is not only depriving the same day delivery rider of growing up the professional ladder or learn new skills but also affecting the brand’s reliability. Imagine the face of the same day courier service is a 10th pass with no professional skills and no reliability as he is just a temp with the company.

As expectations increase, many consumers are dissatisfied with their current professional courier service. On average, across all geographic markets, delivery services receive a Net Promoter Score (NPS)6 of negative nine (-9). The top causes of dissatisfaction are high delivery prices, unavailability of same-day delivery, and late deliveries. (Capgemini). It becomes essential to understand that it’s the service that matters. With so many players in the market, the only differentiator will be how the deliveries are made. By saving some pennies on the salary of the delivery executive, companies are compromising on the standard of delivery. 

The rider is making delivery only keeping in mind his earnings and incentives. To meet his targets and earn he may not prioritize or even consider what is the brand’s requirement. Whether the brand wants to be a professional courier service or the fast courier service, the rider who is running 12 hours shift may not be physically equipped to ensure safe and secure deliveries. Companies like Pidge are disrupting the on-demand delivery and courier services by ensuring g that the delivery executives are not only getting benefits of the full-time employees but also hiring full-time employees and training them how to make sure that from courier pickup from home till the time the product is the best experience for the customer. 

The need for convenience and ease is fulfilled once the customer book courier online, but the need for having a special experience by greeted with a smile by a well-trained delivery executive will definitely have an impact on the customer and the customer would keep coming back for the special services.  

Customers may not just give a rating based on the timeliness of delivery i.e. how fast is your courier pick up or delivery. The real differentiator would be the experience. The experience, that would not only be limited to the product or service, but also include the interaction with the rider. After all, they are the “face” of the brand.  

The future of one day delivery services is better customer experience through better service and the delivery executives. Professional courier services like Pidge have proved this by hiring delivery executives and train them to make each experience exceptional and many are following the track. This will be the key differentiator going forward.