Why are private delivery firms so terrible?

Don't get excited. Image: Getty.

This article was originally published on our sisters site, the New Statesman, back in 2013: some correspondents have claimed that the technology at some companies has since moved on. 

But at others, it very clearly hasn't, and tis the season where to topic becomes suddenly, frustratingly relevant once again. So...

Last summer, a friend living in Palestine wanted to send us a wedding present. She placed an order on a florist’s website, the florist gave the flowers to a private delivery firm, the delivery firm gave them to a driver, and the driver got them as far as our front door.

No one was in. So he put them back in his van and took them back to the depot, where they promptly died. Three days later, after waiting in specially, I took delivery of a large and expensive box of compost. Thanks to the magic of the internet, it is now possible to send flowers in London all the way from Gaza, yet delivery companies remain flummoxed by the impenetrable barrier of a locked front door.

Earlier this year, a different delivery firm was bringing me a new phone and, not wanting to go through this rigmarole again, I asked for it to be delivered to my office. It wasn’t. At the appointed hour, the whizzy online tracking service unilaterally decided I’d rejected the delivery. That evening found me in a windswept industrial estate car park wearing a high visibility jacket, attempting to explain that the reason I didn’t have a utility bill proving I lived at the delivery address was because I don’t live in my office.

“Don’t antagonise them,” whispered the man in the queue behind me. He was clearly an old hand: he’d brought his own high-visibility jacket.

With an estimated 10 per cent of Britain’s retail spending now spent online, delivery firms like Yodel, CityLink and DPD are playing an increasingly prominent role in our lives. And yet they are, as MoneySavingExpert’s Martin Lewis succinctly described them recently, “crap”. Everyone has a story: of parcels left in bins or thrown over walls, or automated phone lines that cheerfully tell you your package has already been delivered when it quite obviously hasn’t.

The public irritation seemed to peak over Christmas, when the papers were festooned with stories of presents going missing or arriving sometime around 29 December. When one firm failed to deliver to Labour’s consumer affairs spokesman Ian Murray, he was told it was because his Edinburgh constituency office didn’t actually exist. Later, the firm issued a clarification, blaming the fact that “Scotland isn’t part of the UK”.

It’s hard to think of another industry where you can so regularly fail to provide the service you’re contracted for. Taxi drivers don’t drop you three miles from your destination. Any restaurant that intermittently announced that the chef couldn’t find the ingredients, so you’ll have to cook the meal yourself, wouldn’t last five minutes. Yet private delivery firms, apparently, thrive.

The firms in question maintain that the vast majority of deliveries are, in fact, successful. Yodel says it delivers 92 per cent of its parcels first time. DPD goes further, claiming that the success rate for parcels delivered using its “Predict” service – the online tracking thingammy – is 97 per cent.

It’s possible a sort of confirmation bias is at work here: that we forget the nine deliveries that worked perfectly, while remembering the one that ruined our day. More likely, though, the figures are misleading. When a parcel is stuffed inside a wheelie bin, or chucked unceremoniously over a back fence, it has, as far as the driver is concerned, been delivered. The same can be said of deliveries expected by 24 December that turn up sometime in mid-February. As long as it’s a first attempt, that’s a success. Big tick. Job done.

So, let’s accept the premise that delivery firms are, quite often, not very good at actually delivering stuff. The obvious question is why.

One answer is simply that we’re expecting too much. When a driver knocks at an empty house, they have the choice of leaving a parcel somewhere out of sight, where it might get damaged or nicked; or of taking it back to the depot, which is a pain for all concerned. Either option will make a lot of people unhappy quite a lot of the time, and result in angry front page stories in the papers. The poor driver can’t win.

This is true, as far as it goes. But it doesn’t explain those incidents in which the firm claims a package has been rejected, without making any attempt at delivering. Nor does it explain the vexingly common phenomenon in which drivers post “sorry you were out” notes through letterboxes, without actually bothering to check. More than one person tells me they’ve confronted a driver as he was doing this: in each case, he rather sheepishly confessed he didn’t actually have their parcel at all.

In fact, there might be a structural reason why delivery firms are so often rubbish:  they’re accountable to the wrong people. When you order something online, you don’t pick who delivers it, the retailer does. As a result, you can’t boycott the delivery firm; neither are they the ones liable to compensate you if they screw up. There’s not enough payback for failure.

To make matters worse, many of these firms rely on self-employed drivers (this is particularly so at peak times such as Christmas, but seems to be true all year round). These guys are expected to do something like 100 drops a day, and are paid by the delivery. Leave aside the fact they’re even less accountable to you than their employer is, and consider how this’ll influence their behaviour. They have every incentive to prioritise easy deliveries, and no incentive whatever to care about you. If you’re slow to the door; if it’s difficult to park; if they forget to collect your parcel altogether, then that’s just too bad.

Would boycotting online retailers who use these firms change any of this? Eventually, perhaps. But even if the public were willing to give up its home shopping addiction, the lack of transparency regarding which delivery firms a retailer uses would rather blunt the attack.

The bottom line is that delivering parcels is an expensive game. You need a national network of depots and drivers and, ideally, a call centre (all of which might make one ask if we weren’t better off with a single national Post Office). The business is seasonal; the overheads are high. These are not obviously lucrative firms. It’s just possible that the service we get is the one we’re willing to pay for.

Jonn Elledge is the editor of CityMetric. He is on Twitter, far too much, as @jonnelledge.

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What do new business rates pilots tell us about government’s appetite for devolution?

Sheffield Town Hall, 1897. Image: Hulton Archive/Getty.

There have been big question marks about any future devolution of business rates ever since the last general election stopped the legislation in its tracks.

Not only did it not make its way to the statute book before the pre-election cut off, it was nowhere to be seen in the Queen’s Speech, suggesting the Government had gone cold on the idea. (This scenario was complicated further recently by the introduction of a private members’ bill on business rates by Conservative MP Peter Bone, details of which remain scarce.)

However, regardless of the situation with legislation, the government’s announcement in recent days of a pilot phase of reforms suggests that business rates devolution will go ahead after all. DCLG has invited local authorities to take part in a pilot scheme which will allow volunteer authorities to retain 100 per cent of the business rates growth they generate locally. (It also notes that a further three pilots are currently in operation as they were set up under the last government.)

There are two interesting things in this announcement that give some insight on how the government would like to push the reform forward.

The first is that only authorities that come forward with their neighbours with a proposal to pool all business rates raised into one pot across a wider geography will be considered. This suggests that pooling is likely to be strongly encouraged under the new system, even more considering that the initial position was to give power to the Secretary of State to form pools unilaterally.

The second is that pooled authorities are given free rein to propose their own local arrangements. This includes determining, where applicable, a tier split (i.e. rates distribution between districts and counties), a plan for distributing additional growth across the pool, and how this will be managed between authorities.

It’s the second which is most interesting. Although current pools already have the ability to decide for some of their arrangements, it’s fair to say that the Theresa May-led government has been much less bullish on devolution than George Osborne in particular was, with policies having a much greater ‘top down’ feel to them (for example, the Industrial Strategy) rather than a move towards giving places the tools they need to support economic growth in their areas. So the decision to allow local authorities to come up with proposed arrangements feels like a change in approach from the centre.


Of course, the point of a pilot is to test different arrangements, and the outcomes of this experiment will be used to shape any future reform of the business rates system. Given the complexity of the system and the multitude of options for reform, this seems like a sensible approach to take. But it remains to be seen whether the complex reform of a national system can be led from the bottom up. In effect, making sure this local governance is driven by common growth objectives, rather than individual authorities’ interests, will be essential.

Nonetheless, the government’s reaffirmation of its commitment to business rates to devolution and its willingness to test new approaches is welcome. Given that the UK is one of the most centralised countries in the western world, moves to allow local authorities to keep at least some of the tax revenue that is generated in their area is a step forward in giving places more autonomy over how they spend their money. That interest in changing this appears to have been whetted once more is encouraging.

There are, however, a number of other issues with the current business rates system which need to be ironed out. Centre for Cities is currently working on a briefing of the business rates system, building on our previous work in this area, and we’ll be making suggestions as to how the system can be improved.

Hugo Bessis is a researcher for the Centre for Cities, on whose blog this article originally appeared.

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