On-demand last-mile delivery platforms and new last-mile parcel networks were among the top companies attracting investment in 2021, when funding for supply chain startups reached a record $80 billion-plus during the pandemic-fueled e-commerce boom.
UPS acquired gig platform Roadie as part of an investment into same-day delivery service in October 2022 for $586 million.
Launched in 2014, the crowdsourced delivery platform uses its “on the way” app to deliver items from retailers and other shippers fast. It helps small businesses and big U.S. retailers such as Home Depot and Walmart close gaps in the last mile of their distribution networks.
Using a gig economy model, Roadie matches drivers and the excess space in their personal vehicles with companies that need deliveries going in the same direction. UPS provide the physical infrastructure for the supply chain to function.
Roadie claims to have 200,000 drivers and the largest local same-day delivery footprint in the U.S.
On its “about” page, Roadie presents part of what sounds like an elevator pitch: “Today, 250 million passenger vehicles will hit the road with more than four billion cubic feet of unused cargo space. What could happen if we put just a fraction of that wasted capacity to good use?”
Roadie claims to offer cheaper shipping costs than traditional carriers from as low as $10 with no hidden costs. The company website gives examples of what you might expect to pay to send various items such as a key, a kayak, a kitchen sink or a kettleball a given distance.
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Roadie drivers will make on-the-way deliveries of anything from lost baggage to surfboards and cupcakes. You can expect to earn $8 to $650 per gig (not per hour), according to a review from SideHusl.com, a company that researches and rates online platforms that allow you to make money on the side.
UPS was looking for ways to break into the same-day delivery market, going up against delivery platforms like DoorDash and Uber while retailers like Amazon and Walmart wern building out same-day delivery capabilities.
Buying Roadie put UPS directly in the game while addressing some of the limitations of using its own network for certain packages, Wall Street Journal reported. UPS said that Roadie drivers can deliver items that don’t fit because of their size or because they are perishable or in shopping bags.
Marc Gorlin started Roadie in 2014 when he needed tiles transported from Alabama to his condo in Florida. He realized that there was likely someone already driving that way who would consider delivering the items for a fee.
Roadie previously raised funding from Home Depot, UPS, former Aphabet Ececutive Chairman Eric Schmidt, and others, according to CrunchBase. Gorlin said the pandemic helped Roadie sign on more retailers who needed to deliver orders fast to shoppers who were avoiding retail stores.
Roadie continues to operate under its own name.
“The fragmented last mile is rapidly reaching a tipping point because of unprecedented funding and new market entrants,” said Brian Broadhurst, senior vice president of supply chain consulting at digital logistics platform Transportation Insight.
“Changing consumer preferences and growth in e-commerce are significant contributors to redefining the last mile,” Broadhurst wrote in a report for Supply Chain Brain.