The gig economy is revolutionizing the way goods are delivered, with a flexible workforce meeting the rising demand for fast and efficient delivery services. The core piece of gig delivery work is last-mile delivery. Optimizing last-mile delivery is critical for gig economy companies to stay competitive, improve customer experiences, and ensure the timely arrival of products.
What is last-mile delivery?
Last-mile delivery is the final leg of the product's journey from a distribution center or transportation hub to its destination, which is typically the end consumer's doorstep. This stage is crucial as it directly impacts customer satisfaction and can significantly influence the overall efficiency and cost-effectiveness of the supply chain.
Efficient last-mile delivery is vital for e-commerce companies, retailers, and logistics providers to stay competitive in the market and meet the rising demands for fast and reliable delivery services.
The current state of last-mile fulfillment
Gig work has significantly changed the last-mile delivery sector, leveraging independent contractors or gig workers who operate on a flexible schedule. This workforce model offers notable advantages in terms of scalability and cost-effectiveness. According to a recent industry report, the gig economy in last-mile delivery, which has witnessed substantial growth since 2020 is looking to continue its exponential growth into 2027, with a significant portion of delivery services being fulfilled by independent workers.
In fact, according to a recent report by the World Economic Forum, last-mile deliveries carried out by gig workers in the top 100 global cities will increase by 36% YOY until 2030. This underscores the pivotal role that independent contractors play in meeting the rising demand for fast and flexible delivery services. The scalability of the gig workforce allows companies to efficiently handle fluctuations in delivery volumes, particularly during peak seasons or promotional events.
However, while the gig economy brings undeniable benefits for last-mile delivery, it also presents unique challenges.
3 challenges facing gig-economy companies
1. High demand and pressure for timely deliveries
One of the primary challenges faced by gig economy companies is the high demand for timely deliveries. Customers expect fast and reliable service, putting immense pressure on gig workers to meet delivery deadlines. This demand necessitates efficient strategies for last-mile optimization.
2. Variable workforce in the gig economy
The gig economy is characterized by a variable workforce with fluctuating availability. Gig workers may be part-time, seasonal, or even full-time, making it essential for companies to adapt their operations to the dynamic nature of this workforce. Ensuring consistency and quality in delivery services poses a significant challenge.
3. Risks associated with gig workers
While gig workers offer flexibility, there are inherent risks associated with relying on a decentralized and diverse workforce. Issues such as theft, misconduct, or inconsistent service quality may arise. Mitigating these risks requires a comprehensive approach, including effective onboarding and continuous monitoring.
4 ways businesses can optimize their last-mile delivery operations
1. Streamlining gig worker onboarding
Efficient onboarding starts with a streamlined digital application and registration process. Gig workers should be able to easily sign up, submit necessary documentation, including auto insurance, submit consent for background checks, and complete the onboarding process online. This not only reduces administrative burdens but also expedites the time it takes for gig workers to start making deliveries.
Plus, once onboarded, providing comprehensive training and skill development opportunities is essential. This ensures that gig workers are well-equipped to handle the challenges of last-mile delivery, including navigating routes efficiently, managing time effectively, and maintaining a high level of customer service. Logistic apps and platforms can support the training and continuing education for gig workers.
Using automated technology to access and verify gig worker information, check backgrounds, and supply training to gig workers, can reduce headaches, improve operational efficiencies, and get drivers on the road quicker.
2. Stay on top of continuous verification of gig workers
Continuous verification is essential in the dynamic gig economy, especially for gig drivers with auto insurance. Companies must implement systems for ongoing monitoring to ensure that gig workers maintain compliance with company standards and regulations.
Real-time tracking systems via automated verification enable companies to monitor the changes and accuracy of a gig driver’s insurance prior to and even during deliveries. This enhances security, compliance, and accountability for gig workers and last-mile delivery companies alike.
3. Utilizing technology for performance evaluation
Technology can assist in evaluating gig worker performance. Analytics tools can provide insights into delivery times, customer satisfaction levels, and any areas needing improvement. This data-driven approach allows companies to identify top-performing gig workers and implement targeted improvements for those who may need additional support. These types of technology can include:
Automated verification tools
As discussed above, automated verification systems for gig worker onboarding and continuous verification of auto insurance, background checks, and more can easily be integrated into a last-mile delivery company’s operations strategy.
GPS tracking and route optimization
GPS tracking systems are instrumental in optimizing last-mile delivery. They provide real-time visibility into the location of delivery vehicles, allowing for efficient route planning. Route optimization software further enhances efficiency by identifying the quickest and most cost-effective routes for gig workers.
Integration of AI and machine learning
Artificial intelligence (AI) and machine learning (ML) technologies offer predictive analysis capabilities. By analyzing historical data, these technologies can predict delivery patterns, optimize routes, and forecast demand. This proactive approach enables companies to plan resources effectively and anticipate challenges.
Mobile apps for seamless communication
Mobile apps facilitate seamless communication between gig workers, dispatchers, and customers. Features such as in-app messaging, real-time updates, and delivery confirmations enhance transparency and efficiency. Mobile apps also serve as a centralized platform for managing orders, tracking deliveries, and providing important information to gig workers.
4. Ensuring compliance and safety
Gig economy companies must prioritize legal compliance to protect both gig workers and the company. Understanding and adhering to employment laws and regulations, including minimum wage requirements and labor standards, ensures fair and lawful employment practices.
Fair compensation is also crucial for the satisfaction and retention of gig workers. Companies should establish transparent payment structures and ensure that gig workers are adequately compensated for their time and effort. This not only fosters a positive working relationship but also attracts and retains high-quality gig workers.
Safety is paramount in last-mile delivery. Companies should implement comprehensive safety protocols and emergency procedures to protect both gig workers and the public. This includes training on safe driving practices, adherence to traffic laws, and clear guidelines for handling unforeseen circumstances.
Benefits of optimized last-mile delivery
Improved efficiency and timeliness: Optimizing last-mile delivery processes leads to improved efficiency and timeliness. Streamlined onboarding, continuous verification, and technology solutions collectively contribute to faster and more reliable deliveries.
Enhanced customer satisfaction: Efficient and timely deliveries directly translate to enhanced customer satisfaction. When customers receive their orders promptly and in good condition, it positively influences their perception of the gig economy company, leading to increased loyalty and repeat business.
Cost reduction and resource optimization: Optimization efforts contribute to cost reduction and resource optimization. Automated data verifications, efficient route planning, real-time tracking, and predictive analysis minimize fuel consumption, reduce vehicle wear and tear, and optimize the allocation of gig workers, resulting in cost savings for the company.
Future trends in last-mile delivery optimization
- Emerging technologies and innovations: The future of last-mile delivery optimization is closely tied to emerging technologies and innovations. Robotics, drones, and autonomous vehicles are likely to play a significant role in transforming last-mile logistics, offering faster and more cost-effective delivery solutions.
- Shifting consumer expectations: As technology advances, consumer expectations for faster and more convenient deliveries will continue to evolve. Gig economy companies must stay ahead of these shifting expectations by adopting innovative technologies and adapting their strategies to meet the demands of a tech-savvy consumer base.
- Environmental considerations and sustainable practices: Environmental considerations are becoming increasingly important in the last-mile delivery landscape. Companies are expected to
Rely on tech automation to optimize your last-mile delivery operations
Automation is the key to optimizing last-mile delivery, and MeasureOne’s data access and verification platform brings you automated auto insurance verification for rideshare and delivery drivers instantly, all while prioritizing compliance and safety. With MeasureOne, you can automate access and verification of real-time auto insurance data for your gig workers to:
- Improve your onboarding processes
- Verify and re-verify your driver’s auto insurance
The best part? You can try for 30 days risk-free when you sign up today.