Can Zipments Be a Bike Messenger’s Less-Threatening, More Helpful Uber?

Originally posted in Next City on August 7, 2014

Every passing decade seems to bring another technology that has the potential to dramatically alter, and often shrink, the courier industry.

“The fax machine already supposedly killed the bike messenger industry, supposedly email was [too],” said Joshua Weitzner, of New York’s Samurai Messenger Service. “Back in D.C. I was moving a lot of court documents and paper around, now with electronic signatures that’s all gone. But now that we aren’t moving papers, we move things. What we move 90 percent of the time is related to fashion or publishing.”

In recent years a new player, Zipments, has emerged with ambitions to help couriers deal with the ever-changing industry, while further altering the landscape. “The courier industry is evolving at an astounding rate,” says Garrick Pohl, CEO of Zipments, in an email. “Trying to go it alone with outdated technology and customer service tools is a losing proposition.”

Zipments is an intracity delivery service, via foot, bike or motor vehicle; customers can choose their preference. (The company favors bikes or cargo bikes because they are more environmentally friendly and, often, the fastest way to maneuver around dense cities.)

Whereas traditional courier companies have an office with a dispatcher who takes down jobs from customers and then calls messengers to assign pick-ups and drop-offs, four-year-old Zipments developed a mobile app that allows couriers direct access to businesses requesting same-day deliveries. The company currently offers its full range of services in New York, Chicago and Vancouver, where they have on-the-ground sales teams. In those cities, the company has its own clients, who use the app to post jobs while couriers use it to accept them.

They mostly work with individual couriers, but also sometimes partner with messenger companies that generally have their own clients and, then, accept jobs from Zipment’s clients too.The couriers who work with Zipments go through a screening process that includes criminal background checks, driving record checks (if needed), and formal training sessions before they are allowed to take jobs using the company’s app.

Zipments believes it can improve upon the courier industry’s shrinking bread-and-butter market, business-to-business transactions. Pohl claims there is “a lot of low-hanging fruit” in allowing the companies to rank and request their favorite couriers and generally streamlining the delivery process through the app. But the company is also clearly trying to expand the market for business-to-consumer delivery, which the industry has long shunned because of lower profit margins.

“We definitely believe that the growth of same-day deliveries from e-commerce sites and brick-and-mortar retailers [will] reinvigorate the local delivery industry,” says Pohl. “The same phenomenon occurred almost exactly 100 years ago when the invention of the telephone and car threatened the local delivery industry and then mail order catalogs reinvigorated it.” Zipments could offer local retailers a way to deliver goods to a customer’s home as quickly as their competitors at Amazon and other websites that offer one-day delivery without a storefront.

In some cities — like Philadelphia and Seattle — Zipments has experimented with allowing individual couriers to use the app to build their own client base and, essentially, cut out the middle-man and eliminate reliance on a manned-dispatcher system. In Philadelphia, bike messenger Jorge Brito doesn’t contract with Zipments, but he downloaded the app for free and has been using it for a year and a half. “Zipments is like an idiot-proof version where I don’t need an office anymore,” he says. “I can do everything by my phone and access it all via text or email. I don’t need a dispatcher.”

Of cities where Zipments has allowed individual couriers to build their own businesses using the company’s platform, Pohl writes, “At times that has proven to be successful, at other times not so successful. We are re-examining our playbook on this particular area.”

In none of these cases does Zipments directly employ the couriers, who are considered independent contractors. “They opt in to take jobs that are dispatched to their mobile app,” says Pohl. “They work when they want, where they want.” (They are also free to work with other courier companies in addition to Zipments.) He claims that the company’s highest earners make double what they did in the past.

Independent contractor status generally means very high barriers to collective action, a greater tax burden on workers and no benefits — which is a huge cost in this high-speed industry. The messengers at the cooperatively owned Samurai in New York are leery of working with Zipments because it seemed like swapping out the old boss, a dispatcher company, for a new one.

“Zipments and Postmates [a similar service] have investors they have to answer to, we just have the messengers,” says Weitzner. “Workers’ comp insurance is very, very expensive. [It eats up] all of our profit, [all of] what doesn’t go to a messenger’s pocket or an operating bill. The way to not pay that bill is to make everyone who works for you an independent contractor.” (Zipments is “working with a few different sources to offer group rates for supplemental auto, cargo, disability,” Pohl says.)

New York couriers seem worried that as Zipments grows, the company will try to heavily discount their rates to attract even more business. Of course, as independent contractors, the couriers are free to turn down jobs they feel pay too little. But what would happen if low-paying jobs were the only jobs on offer? They fear a race to the bottom, where college students or high-schoolers on summer break could take a Zipments training course and undercut their wages.

But Zipments’ business model, according to Pohl, places great emphasis on pairing specific messengers with customers who rate them highly and request their service. If a particular customer really likes a particular messenger, they can be given “preferred status” — meaning that worker is automatically assigned their deliveries. After all, most people can ride a bike, but not everyone can reliably navigate the busy, confusing, dangerous streets of The Loop or lower Manhattan in any weather.

“Being a bike courier is a job anyone can do,” says Brito. “But not anyone can do it really, really well.”