Each night, David DeBlasio logs into his Veho app and searches for the next day’s work. It is a daily routine for the gig economy driver as he scrolls through the many routes last-mile delivery company Veho makes available each day in the Philadelphia region.
DeBlasio, who said he makes deliveries for Veho most days, used to spend time working for Uber but finds the package delivery business an “easier thing to do.”
“You are dealing with a product and dropping it off,” he said. “There are days where everything goes wrong, but it [overall] is a very good system. For a gig economy system, it’s very efficient.”
DeBlasio added that the back office and support system Veho provides “is amazing.” Whenever there is an issue with a delivery, he said the Veho support team is there to make things right — for both him and the customer.
“The only thing you can’t get in this world is time,” DeBlasio said. “I look at this way: I’m creating more time for people.”
Veho, in many ways, is a lot like the hundreds of other last-mile delivery companies that have popped up in recent years as e-commerce sales accelerate to what will be an estimated $1 trillion this year.
Many of these delivery companies have tapped into the large gig economy workforce. Most often associated with Uber (NYSE: UBER) and Lyft (NASDAQ: LYFT), the gig economy is vast. Statista estimates the gig economy will reach $455 billion in 2023.
But the gig economy, generally defined as companies that utilize digital platforms to attract and pay workers, is far more than just rideshare. Veho is proving that.
“There is a cohort of drivers that do work on multiple platforms, but there is a group that does only Veho,” Kevin Johnson, Veho’s head of driver, said.
But while many delivery platforms leverage gig drivers, almost none are doing it like Veho is, and that may be giving the company an advantage in the race for market share.
“Drivers can see the length of time a route is estimated to be, the start time, location of packages to deliver and the earnings associated with the route,” Johnson said. “The driver can choose among routes that are best for them.”
Modern Shipper was invited to Veho’s facility just outside Philadelphia to see how the company is trying to reinvent the last mile.
Who is Veho?
Founded by Itamar Zur (CEO) and Fred Cook (CTO), Veho has built itself around the goal of improving the part of the e-commerce journey that retailers have the least control over — from warehouse to doorstep.
In June, Veho announced expansion into Cincinnati and St. Louis to join existing Midwest locations in Chicago, Indianapolis and Milwaukee. Veho will add Cleveland to its network this fall and is now operational in 22 total cities in five U.S. regions. The company has raised a little more than $300 million in funding and has a valuation as of February of $1.5 billion.
How is Veho different from other companies?
To get a better idea of why Veho is unique from other gig economy delivery companies, I visited with Johnson in Philadelphia. Johnson explained how a route is built and why drivers like working with Veho. We then hit the road to complete a typical Veho (albeit one on the shorter side) route in the area.
The most obvious difference, and the one that DeBlasio alluded to, is the way Veho puts together routes. The company offers drivers routes with guaranteed pay that will last between two and six hours, Johnson said.
Besides the transparency of the route, de Blasio said he and other drivers like the consistency. Unlike rideshare drivers who could be waiting around for hours until a ride comes along, with Veho, a driver knows exactly what they are getting. Yet, the platform still affords the flexibility to drive when they want. If a route doesn’t appeal to the driver, they can pass on it.
DeBlasio said he prefers to look for Philadelphia routes that “are a little more condensed.”
Johnson, who worked in product operations management for Uber prior to joining Veho, said this aspect of the platform really appeals to drivers.
“One of the reasons I joined Veho was because I was really excited about how differentiated the service is,” he said. “Historically, the gig economy, conceptually, has the potential to be great for people, but the [way it has worked is difficult for drivers]. Veho gives predictable earnings.”
Johnson declined to say how much a Veho driver typically earns, but it is said to be competitive, if not slightly higher, than traditional rideshare — and more consistent. Veho pays drivers twice a week.
Building a route
In a more traditional gig-driven last-mile delivery, when a customer places an order, the brand transmits it to the delivery company that dispatches a driver for pickup and delivery. While the process can be seamless, the driver might collect only a few bucks for a single delivery and then sit around and wait for another order.
This is Veho’s key differentiator. In the Veho model, brands ship their online orders to a Veho warehouse, where each package is scanned and sorted into a viable delivery route that will be posted at 7 p.m. local time for drivers to choose.
“We build routes late when we have certainty for where packages are going,” Johnson said.
Veho’s algorithm does have some advanced insight as to what packages are expected to reach the facility that day. But until the package is physically scanned in and verified, the routes aren’t finalized.
Routes are organized based on location and the expected time it will take. Once additional data points are inputted, a pay scale for the driver is generated and shown with the route. For routes not chosen, Johnson said Veho will send out additional notifications to the driver force should anyone want an additional route. In some cases, drivers may finish a route early and choose to pick up another.
All packages are delivered the next day, and Veho boasts a 99% on-time delivery rate, Johnson said.
Ready to launch
I arrived at Veho’s Philly facility at 6 a.m. to prepare for the “launch.” Launch is the terminology used for when drivers arrive at the facility to pick up the route’s packages. It is a well-oiled machine. Veho warehouse workers organize each route the afternoon and evening before and place all the packages onto rolling carts — one route per cart.
Drivers are assigned a pickup window time — perhaps one of the few complaints that may exist from a driver perspective as they don’t get to choose the exact time they want to work. As a driver arrives, a worker wheels the cart to their vehicles. Johnson said the bulk of drivers use SUVs, but there are other varieties of vehicles that pull up on this Monday morning.
Mondays are dominated by meal kit companies, but Johnson said the package mix diversifies as the week goes on.
Going the last mile
As drivers arrive for pickups, they must scan each box to ensure it is correct. The Veho app will provide a number for that box — it corresponds to the suggested delivery stop based on Veho’s routing algorithm. DeBlasio said most drivers follow Veho’s suggestions, but Johnson noted that drivers can choose their own routes if they wish.
Drivers will mark each box with the stop number and usually load the boxes into their vehicles in order, making sure the first stop is the last box loaded.
Once our packages were scanned and verified and loaded into the vehicle, we were off to make our deliveries.
At this point, the Veho app will send the customer a four-hour delivery window. On this Monday, with temperatures expected near 90 degrees, that is vital customer communication. One customer meets us at the door to get their meal kit inside before the day’s heat sets in.
The app provides all the information a driver needs. We received routing information as well as specific instructions. One customer wanted the box left on the side of the house.
Upon arrival at a delivery location, we took out the Veho app again and scanned the package to confirm the correct package and location. Once the item was left on the doorstep (or wherever the customer requested), an image was captured along with a second image showing the house number. Both of those are then emailed or texted to the customer as proof of delivery.
Johnson said that despite the automation involved in driving efficiency, humans remain a key part of the process. All Veho workers are encouraged to take routes on occasion so they can experience what the drivers’ experience on a daily basis. Johnson himself will make deliveries as he visits facilities.
“We feel there is an opportunity to listen to drivers and their experiences,” he said. “Our team invests a lot in hearing the feedback from drivers … to improve the experience.”
Driver pay is based on the “contingent properties of the route,” Johnson said, but it is fixed based on the route. And the driver knows the price up front.
Within the app, drivers are able to see some basic properties of their work, including customer ratings and the number of packages delivered to the wrong locations. Drivers can also provide feedback to the Veho support team. This feedback could be specific delivery notes about a location (such as it was inside a building with a locked front door, or the house is hidden by trees) or notes about customers themselves should the need arise. This information may be included in the customer’s profile, so the next driver is aware of any challenges the delivery presents.
“It is our promise to our customers to provide great customer experiences,” Johnson said. “We have to extend that to the drivers as well.”