Back To The Future?
Updated: Dec 18, 2022
I’ve heard it all – drones, self-driving cars, flying cars, droids, 3D printers, etc. What’s going to happen and when? Is there a place for humans as drivers in the home delivery segment? Are self-driving cars right around the corner? Let’s take a peek into the future using a little common sense and no drama or hyperbole for click’s sake…
There’s a driver shortage as evidenced by this article from CNBC. You wouldn’t know it though. If you’ve read anything about home delivery the past few years you’d think that UberEats and Grubhub were delivering food in self-driving cars manned by droids equipped with drones to go fetch any drinks or sides of the ranch the droid forgot. Next we’re gonna hear how food is grown and cooked in the self-driving vehicle during transit using a 3D printer.
Let’s get something straight right now. We can’t even get GPS right yet, okay? I’m not saying some things aren’t going to happen but I take umbrage with the Chicken Littles of the world warning of impending cyborg takeover. I call it the hail envy mentality. What is that you ask? Question – when was the last time you saw a drone delivering anything? When was the last time you were almost run over by a self-driving car? And the last time you saw a robot slapping out a 16″ pie at Dominos – that was when again? Y e a h. Now be honest…in the landscape of a civilization that’s ripe with cellphone cameras…why isn’t there any video of grapefruit-size hail? Exactly. Hail envy. Not saying it hasn’t happened – just sayin I haven’t seen it. Any of it. Doesn’t mean it doesn’t exist, just that it is not very common.
“Question…When was the last time you saw a drone delivering anything?”
The reality is that there is a shortage of drivers and with the turnover rate in the sector reaching as high as a reported 70% it’s not going to get better anytime soon. The struggle is real and across the board extending all the way to the trucking business that is supposedly armed with an armageddon sized fleet of self-driving semis. Not happening. Not now. Not soon. Why? Driverless cars are killing people. Drones can’t knock on, or open doors, and infrastructure and legislation are lacking and what isn’t is lagging. Folks in Detroit are destroying the experimental unit’s companies are putting out and Dominos isn’t sure that customers are willing to walk out their doors to get their food out of the trunk of a delivery vehicle.
Add It Up
Let’s throw in a further dose of reality, while companies need the cars it takes to perform the act of delivery, they come with a pesky side effect…the driver. Drivers are seemingly abundant you might say as you accept the delivery of the pepperoni pie you ordered an eternal 23 minutes ago. But are you so easy to acknowledge the abundance of cheap labor when it takes an hour and a half? Therein lies the conundrum. Until recently the only choices for delivery were limited to pizza and Chinese. Now your phone is a smorgasbord with endless options…but not endless drivers.
I’m not done. Let’s observe the workforce…there are X number of employees available for X job, of those potential employees there are a percentage that own cars. Now understand that a percentage of those are willing to use their vehicle for delivery. Of the willing potential there is a percentage that are of age and have the driving record to qualify to do it. Of that number there is a percentage that can actually do or tolerate the job. Now throw in the breakdowns and the rude customers and stigma of the job…sprinkle in the risk of collision, robberies, endless stiffs from smartasses, include road rage risks – and the ones that stuck around long enough to actually have a car-top scratch their vehicle has dwindled down to a trickle of the employment base you started with. I’m not even talking about the use of cannabis in a pre-legalization society…that’s a whole different and huge issue. Hurry the cyborg.
“Until recently the only choices for delivery were limited to pizza and Chinese. Now your phone is a smorgasbord with endless options…but not endless drivers”.
Finishing The Run
So what is the future? It ain’t pizza. UberEats, Grubhub, Doordash, Amazon and all the rest of the players out there and those to come (and they will come) are the Domino’s Pizzas of the 1980s. This is the new growth segment. Think about it. These new delivery companies have about 5% (if that) of the restaurant delivery market…only 5%! As a previous restaurant owner I can tell you I would sign with every one of these services – and other restaurants will figure that out as well. In the nineties – newspapers that didn’t see what the web was going to do to their business model and failed to adapt or evolve lost tons of money – some even closed altogether. I challenge you to find one printed publication that isn’t online today. Just like the newspapers had their epiphany, it’s time for restaurants to have theirs. Those restaurants that ignore this new normal do so at their own peril. For this reason you will see an explosion of sign-ups in the coming months and years. One winner in this scenario will be the sit-down restaurants that are adding a brand new dynamic to their business – the loser is going to be the strictly delivery restaurant model. One thing is certain with these companies, there are several promising players and first-mover advantage doesn’t necessarily apply. It’s anybody market.
Last But Not Least
Finally, the biggest winners of all will be the tens of thousands of drivers that will be working these jobs. As I discussed earlier, there is already a shortage of drivers and with restaurants, at 5% sign-up rates (and growing quickly) you’re going to need a larger employment base or more incentives and better pay as that percentage explodes. With restaurants coming on board daily and all manner of retail waiting in the wings for same-day delivery, things are going to get interesting for the oft-maligned delivery person. So rest assured ye of mobile means, get the car tuned up and hit the road cause it hasn’t even started to get crowded on these streets.