Home Technology The trilemma for on-demand delivery • businessroundups.org

The trilemma for on-demand delivery • businessroundups.org

by Ana Lopez
0 comment

In the cryptocurrency world, there is a popular maxim called the Blockchain Trilemma, which refers to the difficulty of simultaneously achieving three desirable properties in a blockchain network: security, scalability, and decentralization.

The trilemma states that it is impossible to have all three properties at their maximum level. As a blockchain network becomes more secure, it becomes less scalable; as it becomes more scalable, it becomes less secure; and as it becomes more decentralized, it becomes less secure and less scalable.

When designing a blockchain system, tradeoffs must be made between the three parameters, leading to a balance that is acceptable for a specific use case.

A similar trilemma exists for on-demand delivery in the convenience food industry:

The on-demand delivery trilemma.

The trilemma for delivery on demand. Image Credits: Al Ahmed

It refers to the challenge of balancing three of the most important factors in the on-demand delivery of ready meals: speed, profitability and affordability.

With the model of delivering pre-ordered goods, it is impossible to maximize all three factors at the same time.

This “on-demand delivery trilemma” will continue to plague incumbents in the industry unless they can think beyond the existing model of delivering pre-ordered goods.

For example, to achieve low delivery costs that can be passed on to the consumer, or in other words to achieve affordability, the delivery system must sacrifice either profitability or speed. To be profitable, the company must charge high fees, making it unaffordable, or improve its cost base by being slow. To be fast, the company must either be profitable, meaning charge high fees, or forego those fees and sacrifice profitability.

Below I will give examples of each of the compromises and why it is not possible to get around them when using the existing model of delivering pre-ordered goods.

Incumbents using this existing delivery model include:

  1. Delivery robots.
  2. Route-based ice cream and food trucks.
  3. Delivery apps.
  4. Fast trade.

Delivery robots

Image Credits: Al Ahmed

Delivery robot companies such as Starship, Nuro, Serve, Kiwi and Coco reduce costs by automating the driver. This reduction in costs helps them achieve profitability and affordability, but they sacrifice speed in order to do so.

It takes a robot longer to deliver than a human, and significantly more if we’re talking about slow-moving sidewalk bots.

Route-based trucks

Image Credits: Al Ahmed

Route-based ice cream and food trucks have been around for decades, but new companies like Scream Truck and Zing are trying to modernize them.

However, they operate on the same underlying model of pre-ordering goods and so can only achieve profitability and affordability; no speed.

Because they are route-based, they park in central locations and force consumers to come to them, get in line and buy goods to consume or tow back home. A considerably slow experience.

You may also like

About Us

Latest Articles