[Music]
what you’ve seen in the past few years
is that the model completely shifted
from these guys you know like the UPS
the FedEx all the guys that have assets
all the guys that I’ve like massive
fleet of drivers massive fleet of of
course to a model that is completely
different right and I mean considering
our young you are lucky you probably
have used a lot of these services you
know whether it’s like services or
parcel delivery that is based on
on-demand
you know that is based on you know I
want like immediate gratification in 30
minutes all that type of stuff so there
is a whole hordes of companies that
started in Silicon Valley but also in
Europe and year that came into more the
outsource model okay if you’re if you’re
if you look slightly deeper into what it
means by also by in-house versus
outsource you realize that so when we
talk about in-house model we talk about
ownership of assets you own the trucks
you own the cars you own the bike –
we’re talking about milk run bases milk
one means that you’re go to a single
point of you go to one where us to one
place okay and then you pick multiple
tasks whether it’s packages whether it’s
people carpooling think about packages
and people at the same time it’s a milk
run basis and then three is like
end-to-end control of operations it’s
your own stuff it’s your own assets we
are full control on the other hand you
have the completely outsourced model
that goes with no ownership of assets
think about the uber off right think
about you ever think about Karim
right so no ownership of assets
point-to-point delivery network and rely
on some third party to be able to do the
job okay and I would say the the fourth
one is like immediate gratification
right you want a car now okay or you
want your grocery now all this stuff is
based on mostly based on app and
obviously like this this trend has been
as happen because there is lots of
challenges associated with having a big
fleet you remember like these guys on
the on the left on the left side of the
after of the chart and your
this is why all this on-demand logistics
have been appearing is because one you
have a legacy IT system right a lot of
this a lot of this logistics company are
being built on a different model right
I’ve been built on you know like 40 50
some of them like hundred years ago
under 20 years ago on a system that is
completely different so that’s one two
they focused on return on assets most of
this company are really big okay talking
about IPO and I can ascertain there they
will be trading return on assets versus
customer satisfaction and that’s
critical to understand as you’ll
understand later on and then three is
based again on the central warehouse
system okay good basically a feed off
drivers going to one place picking
undred thousand ten thousand packages
and then doing the deliveries but the
problem is that this model again as
which is limits okay and that’s why you
can see you know there was like this
flourishing honestly like ten hundreds
of e-commerce company hundreds of
logistics companies that have been built
in the past in the past I would say
twenty years especially in the u.s. to
try to go completely on the opposite but
now and you know like if you remember
like the statistic that was in 2014 all
the logistics this that has been
financed and funded by Silicon Valley
investors 70% add on the title the uber
off okay so it just gives you an idea on
how big and how it became obvious to go
to the completely on demand model but
the problem is that now we’ve seen I
mean in the past 20 years now we know
how this model behaves okay and we’ve
seen the pitfalls of this model okay so
the first one is is legal right and you
know I mean if you follow a little bit
about what’s going on in the last mile
on the last mile industry one is legal
it doesn’t matter whether you don’t
consider that this driver performing
that task for you is not an employee the
judge decide otherwise okay and the key
here is that in the US the way they
think about it is that if that driver
makes a fair amount of money and fair
amount is being defined at the state
level if they make a fair amount of
money through your device that consider
they are being considered whether you
want it or not as an employee
and therefore you have liabilities
associated with it so it was one of the
key advantage of the outsourced model
that made that is now gone the second
one is is definitely low stickiness
right you guys are aware of you know the
gig economy and like there is now you
can see you can see a lot of drivers
again in the US the year that there are
multiple apps and are literally deciding
I’ll be charging almost like traders to
see how they’re going to spend that time
on what platform what paths they’re
going to take which basically allows to
have I mean triggers high attrition
between drivers and requires like
triggers very low loyalty between the
driver level and at the end of the day
all three of these or two of these
issues triggers the low consistency of
customer experience okay like you don’t
know and I mean you’ve seen what’s
happening with uber in India and so on
there is tons of problem with about with
you being able to vet the people that
are going to do the job okay and you can
do and I think it’s not it’s just it’s
just a problem that’s going to be
never-ending you know when you grind
that fast it’s very difficult for
companies to be able to vet their supply
and to have to look the same type of
consistency of service across so we took
the example of our joy and how they
actually went down because of the lack
of quality assurance and platform
leakage okay so this is this is this is
this is audience right and then you so
because a lot of these companies have
been aware of these problems that
they’re trying to to find solutions
right so if you look at ship which is
one of the largest on-demand
company in the u.s. they really try to
tackle one two and three right in the
problems that I just mentioned so one
they move all the careers they didn’t
wait for that they didn’t wait for the
Jersey tell them take back state on how
to behave with the drivers the Moodle
most of it or all of their careers all
of their drivers into an in-house model
I basically becoming you know the factor
employees hi and then they really they
they put a lot of intention with the gas
to varying the workforce with regards to
training and again retention so this
this is you know like we’re you know
again like I think this companies have
done a great job to be
or to tackle these issues it’s
never-ending but I think that there is
quite a lot of a lot of things that has
been done but ultimately and you know
and this is what this is what I want to
address they fail all these models fail
to fail to to be lean and and this is
relax elect bear with me on the macro
level macroeconomic level model the
maximize efficiency will win no matter
what
and just think just think about a
scenario okay you’re in Tower one okay
whatever you wherever it is and you want
to send a package to your friend in
tower be say ten kilometres away okay
and then at the one minute later another
person in tower a wants to send another
package to tower B the on-demand economy
will treat that as two separate requests
I and I know that right so hundred
hundred people live in a concert you got
a hundred Bieber cars calm okay so they
all come to the same point and then
obviously goes to all the delivery
points on all the destination right
while the consolidation model and we’re
you know like if you look at the the
traditional logistics will consider this
as batching orders and being able to do
either carpooling for people or or
regular regular deliveries which means
that which means three things okay which
means that one the on-demand economy
thinks about local optimum okay for you
as a consumer the only thing that
matters is that how fast you’re gonna
get the car but at the macro level this
is horrible you can have like ten cars
that are being idle that are just
running around to make sure that you
have that you have the better customer
experience okay so that’s one – it’s
extremely inefficient okay if you look
at resources and don’t think only about
resources as as as Natural Resources
even though I mean is going to become
one of the challenge in the next I mean
if for sure for the next generation is
that it’s not only resources it’s about
time it’s about people all right it’s
time it’s extremely suboptimal you know
like for example if you take the example
that I just took you know these two
tasks could have been work completed by
one driver waiting for one minute to get
the other packages and being able to
perform the same level of tasks
with like 50% of the resources both time
and gas and then three at the end of the
day what we thought was scalable okay
because we always thought that the
on-demand economy was completely
scalable what we thought was capable
becomes completely and scalable like you
cannot have tank drivers going to one
tower let alone 100 drivers go into one
where else each of them picking one
package is just it just does not make
sense at scale so I mean just and that’s
my last point I think at the end of the
day we need to take the best of both
words right and the companies that are
you know that are working whether
they’re coming from the in-house
perspective or from the outsource we
need an hour regime moving to somewhere
in the middle right we talked about ship
for example we talked about some some
other companies but I believe that even
so like the next model and this is a
little bit what we were trying to work
on and believe me this is just extremely
complicated is try to see whether we can
find something around here right
something the batch is what you and what
our generation wants with the guts to
on-demand economy and predictability and
still matching what makes their in-house
model great which is you know like low
cost for delivery and and being able to
have like a scalable operations for businesses so that’s it thank you and