A Startup You’ve Never Heard of Just Raised More Than Uber

A Startup You’ve Never Heard of Just Raised More Than Uber

If we look back over the last 10 years, there has been a larger and larger focus on on-demand delivery of goods and services. Whether that be Amazon Prime or Uber. There’s no argument that the most important thing is you get what you want, when you want it. At least, that’s what I thought until I heard about Picnic — a year and a half old Dutch grocery delivery startup that is running on a different philosophy. And it’s paying off.

Picnic recently raised €100 million as part of their series B round. To put that into perspective, Uber raised $US37 million in series B.

The most interesting thing about Picnic is how they approach delivery.

“The vehicles work in a way that’s reminiscent of old-fashioned milkmen: they follow set routes and deliver at set times, so costumers always know when to expect their fresh foodstuffs. That’s not only more efficient than how most grocery delivery companies go about it now — criss-crossing town to deliver at requested times, sometimes coming back to the same street after doing a delivery across town — but also allows Picnic to deliver for free.”

It’s not on-demand. At first glance, Picnic couldn’t be more different to Uber. A recently released New York Times piece gives a fascinating look into how Uber influences drivers to drive more. And not to over simplify, but it is all in the hopes of increasing the supply of drivers on the road.

And in turn, that should bring down the time it takes for you and I to get a ride. One of the most fascinating pieces is the algorithm called forward dispatch.

“To keep drivers on the road, the company has exploited some people’s tendency to set earnings goals — alerting them that they are ever so close to hitting a precious target when they try to log off. It has even concocted an algorithm similar to a Netflix feature that automatically loads the next program, which many experts believe encourages binge-watching. In Uber’s case, this means sending drivers their next fare opportunity before their current ride is even over.”

Queueing drivers has obvious benefits for both riders and drivers. For riders, the wait time is lower and for drivers, the idle time is lower. The article’s general focus was on how forward dispatch made the default behaviour to continue to drive. That’s true. But what forward dispatch is really about is boosting efficiency. It means that the driver is always driving towards another fare. What’s interesting to think about is this is exactly why Picnic doesn’t do on-demand delivery.

For Picnic, it’s all about not crisscrossing the city in order to delivery food at a specific time. Because of the lack of volume, they are forced to maintain strict paths. Both Uber and Picnic are focused on bringing down the amount of time that is spent travelling in the wrong direction. Forward dispatch is only viable if you have volume. Picnic’s old school approach is a way to maximum the amount of time spend travelling in the right direction. Without volume. It’s the method of the milkman.

Read more: https://blog.spaceship.com.au/a-startup-youve-never-heard-of-just-raised-more-than-uber-985a0d34484

  • PicNic: the method of the milkman, not of Uber.

 

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