How Tokenization Can Curb the Costs of Our Insatiable Appetite for On-Demand Everything Now

by CryptoBlastoffOctober 3rd, 2018

Too Long; Didn't Read

<span>A</span>ll of us exchange various forms of value every single day. Whether it’s time for money or money for products and services, everyone is at once a taker and a giver.

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Logistics Specialists — Serve — Are Putting Their Skills on The Blockchain

All of us exchange various forms of value every single day. Whether it’s time for money or money for products and services, everyone is at once a taker and a giver.

The wheels of commerce never stop spinning. Internet connectivity paved the roads of instant gratification, and most of us are happy to drive them daily.

As consumers — conditioned by the advertising industry and deeply influenced by social media — we tend to lack any semblance of patience. We want things immediately, and we want them to get here on the cheap, preferably free.

Because, you know, that shiny new gadget is all the shinier when it arrives on Saturday rather than Monday. And the food always tastes better if you didn’t have to fetch it on your own.

Unsurprisingly, the ‘must have it now’ mentality presents unlimited opportunities for entrepreneurial ventures.

A shining example is the rise of same-day deliveries. The industry is piping hot. Warm cookies and muffins, family-size meals, electronics from the Apple store, iced coffee, fine wine, and chilled beer.

All of these goodies can be yours in about an hour by tapping a few buttons in an app. Overnight shipping isn’t practical for vegan smoothies, now is it?

However, the logistics of satisfying our endless wants and desires can be super-tricky. Loads of moving parts make for challenging efforts of coordination.

Unfairly compensating themselves are the companies behind those apps, making a killing off of our impatience.

Enterprising intermediaries are seizing every chance to fleece us for the once-unfeasible services now ingrained in our everyday lives.

Now, the web carried us quite far in our quest for convenience. But the blockchain can propel us even farther, trimming the fat along the way.

New crypto startup — Serve — is busy building a platform that leverages the organization’s logistical experience to create a global economy of incentivized participants.

You see, disintermediation creates a natural reduction in fees for every transaction within any given economy. Cut the middleman out of the equation and the rest of the players — buyers, sellers, and providers— do more winning.

And on the Serve network, those winnings flow to consumers and businesses, as well as the service providers working so hard to ensure your ice cream doesn’t melt before arriving on your doorstep.

Now, food delivery is only one of many industries the Serve project plans to infiltrate. We’ll cover general deliveries in this article, but it’s worth noting here that the platform intends to dive much deeper into the pools of global commerce.

How exactly is the Serve project going to shake things up? Keep scrolling, and you’ll find some answers.

But first, here’s a special delivery with your name on it…

Disclaimer: This is not investment or financial advice. I’m not a financial expert by any stretch of the imagination. Most information within this article is speculative and merely personal opinion. Always conduct your own research before contributing to any startup projects.

Always remember that what you do with your funds is your decision to make. And if that decision proves too difficult for you alone, seek guidance from a financial professional.

I may or may not receive a small allocation of tokens for creating this content. That said, I do my best to remain unbiased and fair. I try to avoid all FOMO and FUD and don’t wish to evoke those emotions in my fellow crypto-heads.

How to calculate the best value for online purchases

Amazonian Inefficiencies

Ever ordered several items from Amazon only to have them arrive in a few separate boxes? Maybe one of them was mostly air.

Ugh. My toothpaste had to ride solo in there, huh?

I don’t know about you, but to me, that’s the opposite of efficient. Sure, products reside in different warehouses spread across different regions.

But what’s that got to do with the UPS hub making the deliveries?

Shouldn’t the single order trigger the guys and gals in brown to assimilate before delivering? Do you really need to burn all that gas driving to my house three separate times?

Unless I chose overnight shipping for something, slow your roll!

In situations where a single online order becomes a decentralized mission of separate deliveries, I often wonder about the actual costs UPS must incur.

Surely the Amazon/UPS partnership is large enough to warrant special handling of split-delivery orders.

The current state of fragmentation within last-mile delivery services is an epic failure — in terms of greenhouse gases alone.

Hey, UPS, can you HODL this package for us while we wait for the others to get here? Thanks, buddy.

Inconvenient Truths About Postmates, Uber Eats, & Similar Platforms

Over a six-month stretch of 2017, I drove all over town bringing food and random goodies to random people.

I enjoy the freedom of driving, and the gig gave me access to parts of my hometown — some replete with security guards in little shacks — that I never knew existed.

Now, downtime can be disastrous to your bottom line. Not long after starting to drive for one service, I added another so that the gig would, theoretically, become more profitable.

Shifts began with two apps open. First come, first served.

I’d often switch back and forth all shift long. On rare occasions, I’d drive solely for one service or the other, but usually both.

Even with both apps active, I’d still encounter lulls, and some 4-hour shifts ended with less than $20 heading to my account. Yes, the pay for delivering food can be abysmal. Because, no, most of the extra fees customers pay won’t go to the driver.

Not every customer is aware, but the system runs on tips. Without them, the gig pays less than minimum wage. Gas and vehicle maintenance only deepen the wounds.

And the underlying reason for all of this insufficient compensation is the enormous fees the platforms — rather than the hardworking drivers— enjoy raking in.

Many patrons are under the assumption that their driver is making more than they truly are. “I don’t need to tip since it’s already factored in,” they must tell themselves.

Nope, not the case! Prices balloon because of the platform operators, not the act of delivery, which the system must have.

Food-delivery platforms’ lopsided pricing structure

Let me give you a real-life example. There’s a Mediterranean restaurant in my neighborhood that serves tasty gyros. I eat them so frequently I’ve memorized the post-tax, in-person price of $8.67.

One rainy day found me feeling unusually tired and lazy yet hungry. I figured I’d just use Uber Eats. I opened the app, found the restaurant, and then proceeded to find my beloved sandwich.

Where $7.99 once stood, $9.99 was now in its place. Yes, a 25% bump in cost. I was already aware of delivery fees plus a tip for courteous service, but this unsavory morsel of an upcharge left a sour taste in my mouth.

Everyone Must Pay

Now, although the customer lines the platforms’ pockets the most, the restaurants take a hit as well. As do the drivers.

How Customers Get Milked

Hungry eaters may think they’re only paying two fees, but in reality, there’s a trio:

Inflated Menu Pricing — Regular prices don’t apply here. Expect to pay 10–20% more for the same food that dine-in or take-out customers eat.
Service Charge — In addition to swollen prices on menu items, we get to pay another fee for the sake of being overcharged in the first place.
Delivery Fee — No surprises here. Somebody’s got to compensate the (hopefully) friendly driver that brings your food to wherever you are.

How Restaurants Get Squeezed

Eateries using outside delivery services can expect to pay a service charge in exchange for the uptick in orders. In the case of Uber Eats it’s 30%. Yikes.

Let’s do a little math, shall we?

Our menu item is sushi-grade poke bowls. For the sake of argument, we’ll say a busy restaurant sells 200 bowls in a day. Half of the bowls stay inside, and the other half hit the road.

Poke Bowl Pricing Metrics

Restaurant cost = $8
Dine-in price = $20
Delivery price = $24
Service charge = 30% of gross sales

In-house Orders

Sales: 100 X $20 = $2,000

Cost: 100 X $8 = $800

Sales minus Cost = Profit = $1,200

Upcharged Delivery Orders

Sales: 100 X $24= $2,400

Cost: 100 X $8 = $800

Service charge: $2,400 X 30% = $720

Sales minus Cost minus Service Charge = Profit = $880

Profit Difference = negative 27%

So, in this example anyhow, for the privilege of using the Uber Eats service, restauranteurs pay what’s essentially a hefty tax. Every dollar that comes in sees 27 cents go right back out.

Maybe it’d be worth it if a restaurant can utilize bulk prep methods to trim costs. However, to give up 27% of profits is a steep ask.

One wonders if the eatery wouldn’t be better off spending the same — or even less — on a marketing campaign.

Even though owners feel the pinch of steep fees, it’s hard to ignore the extra revenue they otherwise wouldn’t have.

Tough choice for some restaurant owners, no doubt. But reason enough for the owner of a local Vietnamese bánh mì sandwich spot to deny the platform’s courtship attempts.

How Drivers Get Burned

The logistics of the Uber Eats operation are far from perfect. Aside from getting only a portion of any delivery fee, drivers must contend with long wait times due to inefficiencies.

Sometimes it’s a fun little glitch where the app assigns the same order to two different drivers. Upon arrival, the last driver hears their order is already out the door. So I drove all the out here for nothing then? Thanks!

For the uninformed, most food deliverers are paid by the order, not by the hour. Aside from wasting gas and mileage, losing time that could be better spent making actual deliveries can be especially costly.

And while the platforms can be detrimental to a driver’s earnings, the restaurants themselves are often to blame.

Home of the Big Mick

I can honestly tell you that, after completing over 1K deliveries, WacArnold’s is the worst offender of them all.

The situation was so ugly that I’d immediately cancel any orders from that “restaurant” appearing on my app.

You see, with the rare exception of an all-star manager, Mickey D’s employees HATE orders from Uber Eats.

Why? Because Uber orders arrive on a separate terminal tucked away near a register off to the side somewhere.

Detachment from the main flow of burgers and fries spills a heaping helping of WacFlurry all over the whole operation.

Here’s an actual conversation I had with a visibly flustered employee whose name tag read Bill:

Bill: What can I get for you?

Me: “Hi. How are you doing this evening?”

Bill: “Oh, I’m a little stressed.”

Me: “Sorry to hear that. I’m here to pick up an order for Uber Eats.”

Bill: “That’s why I’m stressed.”

Orders are often forgotten and not entered until after “the Uber” shows up. Yep, they really called me that on multiple occasions at multiple locations. Someone announces to the rest of the crew, “the Uber’s here!”

Standing around waiting for a greasy brown bag — or unplaced orders from any other joint — cuts deeply into a driver’s earnings.

What’s more, let’s not ignore the trickle-down effect of a small or non-existent tip because the order took so long getting to the customer.

Yes, on-demand delivery services are convenient. Who doesn’t want excellent food or handy gadgets on the quick? But at the same time, they’re needlessly overpriced.

The on-demand delivery industry’s not going anywhere. We all get hungry — for food or practically everything imaginable — every single day.

However, we can do it better, and we can do it cheaper by putting the operation onto a blockchain.

Now that you’re fully aware of why the system is so costly, let’s examine how the Serve project aims to improve the entire experience…

The Serve platform’s economy runs on SRV tokens

Tokens Can Crush Costs

The Serve platform runs on its native SRV token.

The same tokens power smart contracts, which fuel network transactions.

Swerve chose to bake an escrow system into transactions. All parties must uphold their end of the agreement before a transaction settles.

Customers pay for goods and services with SRV tokens, but businesses and deliverers must also stake tokens. Think of the concept as the ante in a round of poker. You need a stake in the pot, or else you don’t get to play.

Once the smart contract agrees that everything’s in order, the rightful share of the transaction’s SRV tokens returns home to originating wallets.

By removing the element of human trust — one reason why blockchain tech exists in the first place — we’re alleviating the need to involve us bumbling mistake-machines every step of the way.

The platform can effectively eliminate bloated fee structures by placing trust in an automated system. We’re putting our faith in programming rather than forgetful Frank in the shipping dept.

Perhaps I needn’t go so far as to use the term “faith” in the first place. Transparency is the name of the game, and by having a public display of everything that’s happening within digital transactions, the element of trust becomes indisputable.

Bad actors don’t stay bad for long because the blockchain calls them out on any shenanigans they try to pull.

Furthermore, economies based on tokens are inherently cost-effective. We’re merely outsourcing jobs to computers — the ultimate accounting bots.

Now, before you get all “they took our jobs!” on me, you’ve got to admit that some tasks are best left to algorithms. Crunching data and storing immutable information are two prime examples.

And on the Swerve platform, fees top out at 2.5%. If we assume a 25% average fee for the world’s various delivery platforms, that’s a 10X decrease!

Everyone Must Win

Serve aims to improve the multitude of last-mile delivery services, no doubt. But they’re not taking an aggressive, ‘eliminate the competition’ approach. Instead, they invite anyone to integrate with their open-source protocol.

The goal is to create industry-wide standards that everyone adopts. The project is basically saying, “look, our current systems and processes need help. We’re experts in logistics, but there are others out there, too. Let’s work together to create a uniform system for everyone’s betterment.”

Now, compared to today’s offerings, the Serve platform’s participants — enterprises, drivers, and customers — gain a massive reduction in fees.

But let’s check into some of the other benefits a global logistics platform can deliver…

How Drivers Gain Endless Possibilities

When the drivers win, there’s a domino effect that makes its way to the businesses and customers too.

I’m living proof of the high turnover rate among on-demand delivery drivers. Translation: Plenty of people out there aren’t exactly doing their best work. Your heart’s not in it when you’re on the verge of quitting.

Serve created a video about my former self. How did they even know? Had this situation been reality last year, I would’ve stayed in the game longer.

My name’s not Alex, but his virtual situation was mine in the real world…

Me, a year ago

Driving while listening to directions, hunting for addresses, and actively monitoring two separate apps is distracting at best and dangerous at worst. Especially the secondary app scenario since it requires physical interaction with your phone while the vehicle’s in motion.

Imagine five of the significant incumbents tying into the Serve protocol. A driver could drive for all of them yet operate from a single interface. Essentially, a simplistic, centralized, token-earning solution.

Downtime shrinks to practically nothing because everywhere you go in a major city, at any time of day, somebody wants food, a product, or a ride.

Not to mention obviating the hassle of creating additional accounts and linking bank accounts and submitting insurance information.

Well-paid drivers are bound to stay on the road longer. Should the Serve platform see some big names jump aboard, making deliveries in your own vehicle becomes much more lucrative.

How Businesses Earn Higher Profits

Similar to drivers being able to grab work for many services at once, business owners can enjoy the same luxury.

The Serve project offers enterprise solutions — including APIs & SDKs — which enable companies to put some of their business operations on the blockchain.

By enrolling with Serve, they’re putting an army of drivers to work for them. No relying on a specific service’s delivery force to grab your goods because the nearest Serve driver is ready to roll.

On the food side, more drivers mean food flying out the door nearly as fast as you can make it. And, since the fees are so low, the decision to enroll should prove simplistic.

How Customers Get Faster Service

Tying back into the large volume of drivers ready to whisk a bottle of whiskey straight to your location, wait times for anything and everything can realize a significant reduction.

Place an order for something and, no matter which delivery service umbrella a driver falls under, your items get to you in a hurry.

Speedy service coupled with low prices keeps customers returning to the Serve platform again and again. Which is also good for the drivers and business owners.

Do you see the circle of self-feeding efficiency at work here? Happy customers make happy business owners and busy drivers. Win/win/win!

Final thoughts…

Cryptocurrencies give us — as responsible, sovereign individuals with the wherewithal to handle our own monetary transactions — the power to have a voice beyond the realm of fiat.

Admittedly, the current state of affairs is the equivalent of the lone cry from the microscopic planet of Whoville.

However, given time, our collective shouts will garner the attention of big-name players will ignore tokens at their peril.

As crypto enthusiasts, we’re in the minority. Most people merely can’t see the benefits. But eventually, we’ll be so loud that the outsiders will have to enter our realm.

I can foresee the same scenario playing out within the last-mile delivery space. A transparent and efficient set of industry standards attracts any business looking to run a tighter ship. Namely, all of them.

And, there’ such a wealth of multi-billion-dollar industries the project is courting. Small percentages of market share in any given industry are perfectly acceptable because of their collective potential.

The Serve project is one to keep both eyes on. The team’s ambitions seem boundless, and they’re out to solve some genuine problems — on a global scale — that most of us deal with on the regular.

I, for one, anticipate the day when the middleman stops overcharging for the epitome of convenience — anything and everything, brought to wherever you are.