Thread by @Knowlesy83

Good work / fair work in logistics - what is needed:

I was CEO of Pedal Me, which we rapidly grew to have the largest cargo bike only fleet in the world.

There was a lot good, and some bad, about how we ran things in that period and I thought I’d share learnings, and make some suggestions for what is needed to improve working conditions in the sector.

We did (and do - tho I’m no longer directly involved) - work by cargo bike that wasn’t possible for others to do due to the systems we used.

Morale was generally good, and people were - and are - incredibly committed to the company.

Logistics is, in general, a shitshow of unfair employment practices, tax dodging and exploitation.

We shone out as way ahead of those around us, but we never got to where I wanted us to be.

@TowardsFairWork rated us 9/10 at our last review: fair.work/en/ratings/uk/

Good things we did:

1) Full employment. This is a much fairer and more honest way of employing people - with the company carrying the risk of its operations.

People getting sick, a pandemic crashing demand, anything else crashing demand - it’s right that the logistics co carries the risk of these. And people deserve holidays - especially from the often tough, physical jobs in logistics.

Gig economy allows significant tax dodging which has a huge impact in such a tight sector, which isn’t possible for full employment based companies.

Luckily we had our secret weapon to balance this out - Cargo Bikes And Knowing How To Use Them which gives you about a 30% advantage across the piece in urban logistics, which is about the amount of tax evasion that’s carried out by our competitors.

Employment also introduces some complexities and a much tighter need for performance management.

Which is presumably why almost all logistics companies mainly use contractors - Uber, Addison Lee etc.

On the flip side / the capitalist argument for full employment - our analysis when we started was that the reason that Uber, Deliveroo et al were unable to get to profit after over a decade in operation was that they had no control over the resource (contractors could just hop

…to another startup with an app and some customers) and this was undermining their ability to control prices, and create efficiencies.

If they put prices up they’d lose their customers to elsewhere, because barriers to entry were so low.

An hourly pay rate alone would have meant a constant tension between ops staff, and the business need, asking for faster work, and the incentives for the riders aligning to encourage them to go slower so that they were paid for more hours, unsighted from any supervision.

We worked around this by:

2)Aligning incentives. Riders were paid an hourly rate plus commission - this worked well to remove some of that tension that would otherwise have existed - now ops and riding staff were aligned - ops staff wanted more productivity to get the jobs done

and riders wanted to get paid lots then get out.

It also meant that as we grew and got more efficient, riders got paid more by default.

Weaknesses included poor / slow feedback to help riders improve performance (we were working on it!) and some impact on rider pay when demand fell (but obvs a lot less than if you were a contractor).

3) Aligning incentives for salaried staff - or attempting to.

We built a variety of systems aimed at allowing salaried staff to be affected by any rise and fall in rider pay.

These were undermined by the fact that we allocated as much cash as possible to riders and dramatically underpaid salaried staff relative to market value.

The intent was to improve efficiency enough to get rider pay to what we saw as a reasonable level and then increase salaried staff pay - this was hindered by a lack of investment in the sector, and some performance issues at key moments which led to us losing customers.

(Mistakes are always likely to happen, humans gonna human, even me ;))

Shout out to our incredible @Crowdcube investors who helped make the company what it is today, even if VC funds were desperately slow on the uptake.

If you look at motor vehicle logistics - this is supported by £trillions in investment to make these vehicles as good as they can be.

Scale effects mean that £trillions are invested in tech products to support motor vehicle usage.

There are many many more products and services needed around cargo bike usage to help with efficiency, and there’s been nowhere near the amount of investment that would be rational in this sector.

4) Everyone Rides. This won’t work in all parts of logistics - but at Pedal Me the vast majority of the work done involved riding.

I didn’t want people making decisions that they didn’t understand the implications of, and I didn’t want an overly hierarchical organisation.

This worked well overall making for better informed decisions, better performance from riders, and allowed us to use senior staff to get to jobs that allowed us to acquire new customers, or allow riding staff to go at short notice for family emergencies etc w/out hitting service.

Some weaknesses/challenges:

- Staff sometimes reported feeling their other work undervalued because they had to go ride
- Disruption caused by being called out at short notice

Overall weaknesses to the system:

1) People wanted to get paid more, and should be being paid more for the skill level and commitment required. At all levels across the company.

This was because of chronic underinvestment in the sector and because we were competing with..

..gig economy companies who were dodging tax and their responsibilities to their staff.

2) Equality Diversity and Inuclusion.

We put significant effort into rebalancing our mainly male, mainly white workforce especially at senior levels; @TowardsFairWork thought our policy as “Class leading” as I recall.

Pay was repeatedly the issue when we spoke to those who we targeted as possible employees from under-represented groups.

More pay, time to network and find potential employees, and money to pay head hunters for senior staff with a particular angle on those from under-represented groups would have helped rebalance the company in my view.

3) Making everyone feel listened to.

As we grew beyond about 80 staff members, discontent grew and informal feedback loops broke down. This has been exacerbated by a union trying to intervene and appearing to spread mistrust as it did so.

Things that might have helped include:

- Split workforce across more sites
- More money - and the time it allows you to spend together as a workforce or in small teams
- Better/more frequent feedback loops? We surveyed staff and fed back - maybe doing this more often would have helped

Overarching themes in improving logistics employment / fair work:

1) Tackle Gig Economy.

Gig economy provides the shittiest most coercive working conditions with the least protections.

The tax avoidance and risk avoidance it allows makes it harder for companies doing the right

..thing and employing their staff to compete.

We grew explosively from outset.

If the gig economy didn’t exist we’d be 30% cheaper than others (our cargo bike advantage) and we’d have taken over the world already - and in done so provided much more fair employment..

..and being able to charge slightly more while still undercutting our competitors would have taken some pressure off and created more space for all the great things we wanted for our employees.

2) More investment in cargo bikes, cargo bike services, cargo bike supporting services.

Cargo bike operations are inherently fairer/better working conditions than motor logistics. Why?

A) It’s skilled work which gives employee more control over the employee-employer dynamic.

B) Cargo bikes reduce the road danger, aggression, noise and stress that make logistics work more stressful across the piece

Cargo bike riders are on the receiving end of some of this.

But they’re also part of fixing it.

C) Cargo bikes unlock more efficiencies - if run correctly and given the right investment support - so they offer the potential for higher pay.

D) Because of the skill element of cargo bike riding, riders are more likely to be in full employment - which means more tax take to add to the social good.

3) Make roads safer.

We accept levels of risk that we would never consider accepting anywhere else - as highlighted by @ianwalker recently.

Logistics workers are at the receiving end of road danger, stress and violence - but they’re also disproportionately dangerous to others.

Safer roads, with more traffic calming, lower speed limits, less traffic (and therefore more cycling / public transport) will significantly reduce stress for logistics workers - and everyone else.

4) A small subsidy on every mile cycled (as opposed to on purchase, which just incentivises buying bikes which might or might not get much use) would help offset the sunk cost advantages of the motor based logistics world, and encourage much more investment in the space.

This should be for a limited time, and start higher, then fall to avoid funding zombie companies.

Oh no! I got a bit sweary about the state of employment in the logistics sector so Twitter hid a crucial bit in the thread….

(Now amended for less sweariness):

“Logistics is, in general, a *den* of unfair employment practices, tax dodging and exploitation.

We shone out as way ahead of those around us, but we never got to where I wanted us to be.

@TowardsFairWork rated us 9/10 at our last review:”

fair.work/en/ratings/uk/