Mox, when the strategy to compete in the last mile is based on hiring the riders.
On the back of their bicycles, with nervous glances, desperate pedaling and bulky square backpacks of the companies they work for behind their back, riders are easy to identify on the streets of any city. They are the ones who bring us the pizza that we have ordered when we do not want to cook, the package that we order on Amazon or the purchase if we do not have time to go to the supermarket. And most do it at their own risk, that is, as autonomous.
This particularity in the employment relationship between delivery companies and riders, imposed by many companies, has generated numerous controversies and a good number of legal processes that cause uncertainty in the sector. And, you know, uncertainty is the enemy of business.
That is why the Sevillian company Mox has decided that one of the pillars of its business model is hire 100% of your delivery people. In this way, they flee from controversy, give security to their customers and hope to improve the performance of their riders by ensuring decent working conditions.
“There are some companies in the sector, such as Just-Eat, that are already betting on a work model like ours. On the one hand because of responsibility towards the workers, but also because a change in labor legislation is expected in Spain, and these companies are looking for a long-term solution that cannot be hampered by a tightening of the regulations. Because there are delivery businesses that, in the case of changing the law, would have to carry out multiple transformations that are not done overnight, ”explains Jaume Boada, CEO of Mox in Spain, to SamaGame.
This work model also allows them be present in both large cities and small municipalities, which, as they point out, is very attractive for customers who do not want to look for a delivery provider in each of the cities in which they serve.
“In Spain we are in more than 50 cities, and that with a freelancer model is very complex, because you have to provide the self-employed with enough packages to earn a living. That is why other companies focus on cities such as Madrid or Barcelona and we are also in small towns such as Utrera or Lorca. In this way, we are also attractive because our clients do not have to look for delivery providers in 50 different cities”, Explains Boada.
For the CEO of Mox in Spain, these two factors are the main reasons for its rapid growth in the last four years, in which They have gone from being a small startup to having more than a thousand employees spread throughout the Spanish geography and landing on the Italian market. As well as reaching a turnover of 8.9 million euros in 2019, which was an increase of almost six million compared to the 2018 figures, according to company data.
Despite this, in global terms the company is not profitable yet because they continue to allocate a lot of money to its expansion, they point out from Mox. Reason why last December they closed an investment round of three million euros, an amount that they want to allocate “to national and international growth, technological development and the effort of the specialized team.”
The economic problem
One of the traditional challenges of the last mile is cost effectiveness. As they are individual deliveries at very different delivery points, their costs are high. And even more so if it is about food shipments, to which must be added the preparation time in which the delivery person is idle while waiting for the order to be cooked.
“Last mile delivery is expensive because very little merchandise moves in a very capillary way. From there, the solution that the different operators are providing is diverse: some do it through technology, others through the aggregation of information and also the disintermediation of the service ”, says Enrique Porta, partner in charge of Digital Business and the sector. Consumption & Distribution for KPMG in Spain.
In the case of Mox, the costs of delivery in the last mile are even higher because they have their delivery men hired. “Betting on the salaried biker model, against the self-employed model, means that we have higher costs than other companies with another model. The only formula to solve this and be profitable is be more efficient to achieve a higher rate of deliveries per hour”, Affirms Boada.
According to the CEO of Mox, the solution of the Sevillian company to be more efficient in the distribution is based on establishing Smaller work areas than usual in the industry for each rider and in a traffic department that decides, manually, which delivery person is the most suitable for each order.
“We draw delivery areas from which our bikers cannot leave, with pick-up and delivery radii of 3 or 4 kilometers. This is important because other companies can establish deliveries up to 7 to 8 kilometers away from the starting point. And when we receive an order, Our traffic department is the one that decides which delivery person, of all those in the area, is the most suitable for that order.”, Explains Jaume Boada.
Technology, important but not fundamental
The logistics sector in the last mile is experiencing great dynamism in recent years. The exponential growth of home delivery, both parcels and food, has created a need for companies and consumers who several startups are trying to cover with different solutions, from cost reduction with freelancers to artificial intelligence.
“There are several ways to approach it, the solution is not unique and it will surely change over time. But many operators are doing it through technology, trying to make delivery costs more efficient ”, underlines Enrique Porta.
This is not the case, however, with Mox. From the Sevillian company they explain that, although their deliveries are managed through a mobile application and an automated system, technology does not carry as much weight in your distribution system as the traffic department.
“We know quite a lot of logistics software, but we have found that many of them are adapted to the self-employed model and not to the salaried model. In this way, the system prioritizes distributing the work more so that all the riders have orders, instead of giving it to the one who is closest. That is why we base our distribution on a powerful traffic department instead of more technological solutions ”, explains Boada.
However, the CEO of Mox in Spain recognizes that this is only possible because, at the moment, the company is not too big. And admit that if they grew a lot, they would have to automate these processes more than they are now.
All this internal framework allows Mox to deliver food in less than 12 minutes, provided that the waiting time for preparation in the restaurant has been exceeded, and up to 12 packages per hour, according to company data.
Despite this, Boada admits that In parcel delivery, the times vary enormously depending on the company that entrusts them with the delivery: “SEUR or Correos have a lot of volume and work by postal code, which allows us to accumulate many deliveries from the same street and reach up to 12 packages an hour. But later there are companies that have a smaller volume and there the ratios increase because we have to go to further points ”.
Regarding the vehicles they use for delivery, they point out that eIn the case of food, they are 90% motorcycles and 10% bicycles. The latter are used, above all, in areas that are difficult to access by cars, such as in the center of large cities.
In parcel your solutions are more diverse: from a delivery man who is walking with a basket in which he carries orders, to 125 cc motorcycles for light loads, three-wheeled motorcycles with a capacity to load 200 kilos or vans for very heavy or numerous shipments.