'Delivery economy' creates wave of low-wage jobs

On a good day, Andre Licatovich can pedal three miles in nine minutes. And when you're trying to make a buck in the delivery business, every minute counts.

Licatovich makes about 20 stops along his route, riding upwards of 50 miles a day through New Orleans’ congested streets as he delivers food from the city's many eateries. At 41, he's lean and muscular.

“It’s like training for a marathon,” he says. “If you want to make money to live you have to ride fast.”

Licatovich is part of the delivery economy, a workforce that's growing so fast that government statistics seem unable to keep up. Food delivery, once largely limited to pizza and Chinese takeout, has exploded. The idea that virtually the entire world of retail and dining is available to consumers at home with a few taps of their smartphone keys has given rise to armies of delivery people, with announcements about new delivery options coming weekly. 

Yelp recently announced it was selling its Eat24 service to GrubHub for $287.5 million. It's part of a raft of competitors that includes services such as UberEats, Postmates and DoorDash. Restaurants are jumping on the bandwagon, too. In July, Pizza Hut announced it would hire 14,000 delivery drivers. 

DoorDash, which started four years ago with only a few drivers, now has 100,000 "dashers."  Postmates started in 2011 with only a few hundred delivery people and now also has 100,000, according to Russell Cook, Postmates' senior vice president of operations.

"It's a new age of delivery," says Peter Backman, an analyst for Horizons, a global data and research company for the food service market. "It's how people live their lives nowadays. They're always on their phones, expecting stuff to be delivered to them and not (having) to leave their homes."

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It's not just about urban office workers. Small towns across America have benefitted from delivery apps with a surge of options. Tony Xu, CEO and co-founder of DoorDash, says the restaurant delivery app has had the biggest success in smaller markets, places where delivery was once limited.

Food delivery remains the hottest commodity, but some of the same services bring other products such as makeup, pet food, dry cleaning and even alcohol. But it's meals brought to doorsteps throughout the nation that are changing how people eat.

Mobile delivery and take out accounted for 60% of all restaurant traffic in 2016, according to Hudson Riehle, senior vice president of the National Restaurant Association.

The business depends on deliverers such as Licatovich, who works 40 to 50 hours over a seven-day week. While he said it’s hard to predict his pay, Licatovich averages around $50 every three hours. 

“There are variables,” he says. “But right now delivery is going bananas.”

But it's still a tough way to make a living. 

Bicycle crashes, potholes, customers not where they say they’ll be and unpredictable weather are regular occupational challenges for Licatovich. So is getting sick, in which case he isn’t physically strong enough to work. This summer, while en route to a delivery, he went through three bicycle tubes fixing flats — then his bicycle seat was stolen.  

“I wish I could say that the repairs come at a more predictable time,” Licatovich says, “but I can’t. They just come. And when they come, you've just got to work with them.”

Demand varies between cities. In New York, Chris Whyte, 26, started delivering by bicycle five years ago. Back then, with few people in the trade, he says the demand was high. He would average $400 in a two-day weekend shift. But these days, with a flood of available delivery people, he makes about $150 a weekend and is struggling to make a living. 

“And that’s if I’m lucky,” Whyte says. “That’s if I’m hauling a--.”

To stay ahead of the game, Whyte says he sometimes blows traffic lights or will ride down a one-way street to save time. 

"If that's the fastest route, then that's the fastest route," he says. 

The pressure is definitely on, but not everyone uses the same tactics.

"It’s not going to be intelligent to speed," says Mica Griggs, 33, a food-delivery driver for Postmates in Nashville who plays by the rules. "You’re just increasing your chances of getting a speeding ticket. It’s more like playing the game correctly."

Better, Griggs says, is to pay attention to trends, such as busy times and seasonal peaks when there are more people demanding food and there's plenty of business and to communicate with customers in advance regarding things like where to park. 

Flexible hours is a major reason why Griggs says it's such a great job. She can incorporate personal errands into her day, like dropping her two kids off at school. Or, she says she can just "chill and listen to music".

When business is steady, the cash flow is easy. Averaging between 30 to 50 deliveries a week, six hours each day, Griggs has supplemented her income with an additional $1,200 to $2,000 a month, depending on the season.

Despite the downsides, Licatovich, says the gig has some unique perks, including the ability to simply turn off his phone when he wants time off. 

“That’s the freedom that every delivery person has,” he says. “If I’m having a bad day, I can just go home.”