Service, reliability, and speed may have landed a new twist with last-mile shipments. On-demand ride-hailing services that became synonymous with Uber transporting passengers are what Roadie intends to leverage with on-the-way package delivery.
“If I’m headed in that direction, or if I’m literally two miles or so from the store, I’ll take the job,” said John Madison, who splits his time as a Roadie driver between Oklahoma City and Tulsa, Okla., expediting anything that can physically fit into his 2013 Toyota Corolla.
Roadie, a six-year-old startup that transfers sold goods on behalf of Advance Auto Parts, Tractor Supply, Home Depot, and scores more retailers, integrates mobile technology with crowdsourcing that pairs retailers and their customers with the nearest available freelancer.
Marc Gorlin, CEO and founder of Roadie, told Forbes magazine that if he had his way, the online app would take full advantage of the 229 million registered U.S. drivers rolling in the same vicinity of an order pick up. But with Roadie’s growth prospects evolving with roughly 200,000 persons on its will-call list, such as Madison—who also runs errands for DoorDash and related apps— the ground delivery package handler aims to cover every square mile nationwide.
What’s more, on the macro-scale, the CEO believes his team has solved a perceived supply chain inefficiency in the automotive aftermarket shackled by fixed schedules. By deploying a Roadie driver in every marketplace within proximity of a parts store, they can promise same-day shipment expectations when online orders become too overwhelming for the outlet. Roadie claims a 96% on-time arrival record.
No delivery truck can be at two places at one time. Limited vehicle space and fixed hot shot runs add to the list of constraints in an industry where Roadie sees an opportunity to wow customers, said Valerie Metzker, who covers partnerships and enterprise sales. “The industry has their own unique challenges where they need a part. Customers are ordering it from three different places, and the fastest one who reaches the destination first wins the sale.”
When Roadie partnered with Advance Auto Parts in 2020, Metzker said, the joint venture fashioned a plan that would ease fleet expenses and ultimately let the parts dealer prioritize its staffing energies on key commercial repair accounts. Meanwhile, Roadie would take care of the do-it-yourselfer segment. A large portion of the merchant’s operations in rural towns, Metzker said, have struggled to service consumers at the furthest ends. “A one-off delivery that a Roadie is doing is a lot easier than paying an [Advance] driver all day, every day to do two deliveries. It’s more efficient to go with the Roadie solution.”
The unplanned need for parts can fluctuate at any time of the day, giving the 5,200-store merchant the flexibility to temporarily summon more drivers when orders are peaking at any given location. “We cover thousands of stores for them. It could be 200 today, 400 tomorrow, 1,000 the next day, or (only) ten the following. It’s up to them,” Metzker said.
Since 2015, investors have been chipping in their financial support to Roadie to the tune of $62 million, according to Metzker. And with the monies, the privately held platform has expanded its resources to enhance the enterprise and small business programs by taking advantage of the newest marketing and sales technologies. “We want to make sure that our support team is growing to support our driver base and our retail base.”
Quizzically, one supporter competes with Roadie: United Parcel Service. Why UPS would fund a rival has fanned some speculation. Some investors comment that keeping allies nearby and its rivals even closer might motivate the international supply chain management company. Evan McAbee, director of investment banking for Stifel Financial Corp., explained that rationale is naive because, with more than $180 billion in market capitalization, UPS could snatch up Roadie in an instant.
McAbee suggests a more benign reason why UPS cannot possibly handle every single parcel exchange. Its investment in Roadie opens up a channel to collaborate and learn from as many other tech logistic firms intent on transforming the future of the package handling industry. “My personal view of UPS is that they are looking to add more capabilities and knowledge of what consumers are looking for and also what shippers are asking for,” McAbee told AMBW.
Separately, driver shortages have caused Uber rates to spike 27% for five straight months through May, indicating that the rider service industry has yet to show little sign of ebbing, noted The Wall Street Journal. Analysts told the WSJ that for recruiting to succeed, the on-demand services that transport goods and people must differentiate themselves in the eyes of drivers who command the choice of the gig.
For Madison and other Roadie workers interviewed by AMBW, ferrying an item a few miles across town for Advance Auto has been a seamless experience. A typical trip begins with photographing the package, notifying the customer via text messaging, and placing the parcel at the household doorstep. “Ninety percent of the time it’s a very smooth process; I get the part and head out.”
Sometimes, however, the return on profit can fall below the break-even point, which requires a dose of streetwise economics. Because Roadie does not cover roundtrips, drivers must make their way back on their dime. “This is insane!” wrote Diane Leduff on a Facebook group post, referring to a screenshot requesting her to accept a 37-mile bid from an Advance store in Baton Rouge, Louisiana, to White Castle, Louisiana, in exchange for a $15.61 commission.
So for Madison, he embraces the concept of scarcity. His runs are ruled by the cost/revenue trade-offs of time, distance, and urgency. Based on the per-mile profit potential of making 50 cents or more, he would accept a bid to go beyond five miles when there is an undersupply of drivers. The longer an order goes unanswered, handlers face the prospect of earning more money. Conversely, a surplus of available people concentrated at an equal distance can depress the bidding rate.
“I like the flexibility of Roadie. I usually try to wait for the price to go up a bit,” Madison said. Periodically, though, he may break his 50-cent rule. “If I’m going that way already or if I’m literally two miles within the store, I’ll take the job.”
