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Pitch

SME's use fleets of their own vehicles to deliver or pick-up products. To reduce emissions the uber model will be used for logistics.


Description

Summary

Currently many small businesses rely on a few methods of delivery for their products and to receive goods. They rely on their own personal vehicles when they start, using various personal vehicles to do picking up, delivery and other tasks. Once they begin to grow they start to purchase their own fleets, which can be many vehicles in size. Their final option is to outsource these logistics to courier services which are expensive, unreliable and often are not feasible for many of their tasks. These options are inefficient, often not up to code or require a substantial amount of start up capital and working capital.

Ride sharing is a service that has revolutionized the personal transport industry but has yet to be applied to delivery services. Many companies have fleets that remain dormant or are under utilized in their deliveries. By using the uber model for delivery services these fleets can be used to generate revenue and solve for businesses that do not have their own fleets. Moreover, it can compete with the courier services at a lower cost, becoming more appealing to SMEs. This platform can be used for various sizes and can serve multiple industries. Helping both the businesses with fleets and those that lack them.


Desirability


How do you know that your solution is desirable to SMEs, and will reduce GHG emissions?

Having worked in logistics for business ranging in size and having used the various methods of logistics I have seen the issue. Delivering goods in pickup trucks that were owned by employees to having entire fleets remaining unused, there is a supply and demand potential. In many industries using vehicles that meet delivery codes is imperative and many SMEs struggle to generate enough demand to afford these services. They then rely on expensive courier services that make their products too expensive or cuts into their revenue. Both parties could use this service to increase their revenue.

Regarding GHG emissions, the more vehicles that are under utilized, the greater the GHG. By sharing the delivery in fewer vehicles, that are less expensive to use and are nearer capacity, the overall emissions of the SMEs are decreased. Increased efficiency and reliability motivates business to utilize this service and generates less demand for increasing fleet size. Therefore, with less vehicles, greater efficiency and more reliability, SMEs will choose to use this service over the current paradigm.


Feasibility


What actions do you propose?

The uber model has revolutionized the transport of people and delivery of foods, however it has largely not been applied to the commercial industry. Logistics is one of the costliest, most important and highest emitting aspects of commercial business. To address this, decreasing the number of vehicles on the road is paramount. Secondly, the commercial vehicles that are on the road must be optimized - delivering below capacity is wasting gas and opportunity to capitalize on this space. Finally, logistics faces numerous challenges in other areas, such as regulation on packaging, thus solving an area like deliveries helps these businesses improve their image profile.

This platform is available to all SMEs but also larger businesses that are not operating their trucks at capacity. This platform will shift business perception from needing their own delivery service and tools, to much more of a sharing economy approach. This has proven effective in numerous industries thus far, and would serve to simplify decisions in logistics for SMEs and would also create opportunities for those businesses with delivery fleets.


Who will take these actions?


Where will these actions be taken?

This business can serve all of Ontario with emphasis being put on major metropolitan areas initially. Once the business is scaled and enough businesses are utilizing the tool, it will start to serve other area. The GTA will be the first major area and will target SMEs that struggle with logistics currently, targeting the distributors, food industry and delivery services of products. The extent of delivery will be expanded to include personal deliveries if demand exists.


What are the proposal’s projected costs?

Development of a platform that allows businesses to put heir vehicles for hire that are undertaking deliveries or can be rented will be the first stage. Part of the expenditures will be an incentive structure to onboard these business, by subsidizing their delivery costs initially will be used. The platform will be offered to SMEs and will have a discount structure applied when they onboard other businesses to use the service. The rest of the funds will be used to create a sales team and developers.

This product requires few resources and will be both a Saas and an application tool. 


Scalability


Once the solution is built and implemented describe a path forward for it to scale to other users/companies.

Beginning with on-boarding companies that have delivery vehicles that are not at capacity will be the initial step. Ensuring that they receive fair revenues (well in excess of cost) to deliver products will be key. Once there is a enough service offered, the rates will be set at a fair market value and the business will be scaled in Toronto and beyond. 


How will your solution lead to change on a larger scale over time (i.e. 3 to 5 years out)? How many businesses can potentially be affected by your solution?


What business and funding model have you considered for your solution to become sustainable?


Impact


What impact will the proposed actions have on reducing greenhouse gas emissions?


What are other key benefits?


About the Authors


Related Proposals (optional)


References