Crowdshipping May Be The Next Sharing Economy Frontier

From swimming pools to parking spots to storage spaces, there are no goods or services that can’t be adapted to the sharing economy.

One of the latest retail-related trends is “crowdshipping,” i.e. crowdsourced delivery. That’s exactly the business model of Roadie, Rappi, Shipit and other startups founded on the principle of using people rather than large corporations to aid in the critical last mile of delivery.

Even DHL attempted to get into the crowdshipping game nearly a decade ago, using a network called bring.Buddy. The concept involved smartphone users carrying parcels a short distance along their regular commute, then dropping them off at the next contact point, where other “buddies” would pick them up and transport them to their final destination.

A few years ago, when Walmart announced a pilot involving store employees delivering packages on their way to and from work, it may have seemed like a half-baked idea (though less so than the original plan to use customers to transport goods). But it’s a concept that just might have legs.

The total transaction value of the fast-growing online payments industry for all products is set to surpass $6 trillion by 2024, according to our Payments and the Platform Economy Playbook. And consumers are anticipating consistent speed and service regardless of where their orders originate.

Monetizing Travelers

In an interview with PYMNTS, Roadie CEO Marc Gorlin explained how the company approaches crowdshipping. He gave an example of a Delta ticket agent who delivers lost luggage to travelers located along routes the agent uses when driving home.

Delivering misplaced baggage is just one example of crowdsourced fulfillment. However, retail can also benefit in nimble ways that online retail giants can’t exactly match. Roadie, which has also worked with retailers and supermarkets, uses data science to match drivers with routes. The company operates in “nearly 89 percent” of the country, with some 120,000 drivers available for work.

Unlike the general case with ride-hailing services, these delivery drivers can “see where they are going and how much they are going to be paid for it,” Gorlin said.

According to Belgium-based crowdshipping company PiggyBee, a majority (58 percent) of its community is made up of travelers that tote and deliver items in their luggage for delivery to other countries. Two of the top routes are U.S. to France and U.S. to India. Popular items transported include official documents, clothing, cosmetics and e-cigarettes.

In a similar vein, Entruster is a platform that uses mail forwarding services to enable shoppers to buy internationally and have purchases delivered by travelers.

Smaller sellers typically find themselves caught between two unappealing choices: straining their budgets to pay for a private delivery company or entrusting their delivery to national parcel services that cannot always offer the same speed. Crowdshipping delivery startup LivingPackets is hoping to solve this problem.

In an interview with PYMNTS, Marie Le Page, co-founder and CEO of crowdshipping delivery startup LivingPackets’ U.K. division, explained how the company aims to fill this services gap with its IoT-enabled solution.

Like many of the previously mentioned startups, LivingPackets also uses the stream of travelers crossing borders by offering them payment to ferry a package on the way to its destination.

The company sees potential in offering retailers same-day cross-border shipments in the E.U., something not even Amazon is currently doing. “Amazon is leading the way on [same-day delivery], but they do that nationally. They aren’t currently offering that option internationally,” said Le Page.

Crowdshipping Security and Trust

The anticipated value of the global mobile payment technology market by 2024 is $3.4 trillion. And online platforms are tapping into mobile technology to power payments experiences. Many of these crowdshipping startups don’t have mobile apps or digital platforms as robust as major sharing economy players.

They also aren’t fully transparent about delivery times or route tracking, and they lack security features like KYC controls. The sharing economy presents easy targets for fraudsters – and lucrative ones, too.

In the August Verifying Digital Identity in the Sharing Economy Report produced by PYMNTS, the most common pieces of personally identifiable information new users are asked to submit when creating new accounts are their email addresses (71.5 percent of respondents were asked for this when creating their accounts) and phone numbers (64.6 percent).

Security is one thing, and trust is another. LivingPackets turns to IoT to ensure that senders are comfortable entrusting their packages to a stranger. Items are packaged in specialized bags equipped with automatic locks and interior sensors to monitor weight, humidity, shock and temperature – all steps intended to prevent tampering. The company also performs identification checks on anyone who registers to deliver, and enables customers to give starred ratings of these “voyager” performances.