Insights to Help Your Business
Gig Economy Deliveries: Convenient or Costly?
Many people once saw the gig economy as the future of last-mile delivery. However, a recent study compares 2022 to 2025 and suggests otherwise.
In today's world, people want things quickly. The gig economy has changed how products move from one place to another. Customers can now get groceries, gadgets, or gourmet meals delivered in just a few hours with a simple tap. For retailers, gig-based delivery services like DoorDash, Uber, and Instacart offer flexibility, rapid fulfillment, and geographic reach.
But beneath the glossy surface lies a complex equation. Is this convenience coming at too high a cost for businesses and their customers? A recent InsureShield study shows that 62% of surveyed merchants report higher theft and damage rates when using gig economy drivers versus traditional carriers.*
In this blog, we will explore the good and bad sides of gig economy deliveries, using data to support our points. We will also give advice for businesses that want to balance speed and safety.
What Is the Gig Economy in Delivery?
The gig economy refers to short-term, freelance work often facilitated through digital platforms. In delivery, gig workers are independent contractors. They use apps to accept delivery jobs, often for many companies at the same time.
These gig drivers are not employees. They use their own vehicles, set their own hours, and operate outside traditional logistics frameworks.
Why Businesses Are Using Gig Economy Delivery Services
- Speed & Flexibility: Gig platforms offer near-instant access to a fleet of drivers. You won't need to carve out the overhead of hiring, training, or fleet management. Need to deliver something across town in 45 minutes? A gig driver is available for that.
- Scalability: During a holiday rush or a flash sale, gig platforms help businesses grow delivery operations easily.
- Customer Expectations: With major retailers offering same-day or next-day delivery, consumers now expect lightning-fast service. Gig platforms help smaller businesses compete on that speed.
The Hidden Costs of Gig Delivery
While the benefits are tempting, many merchants are starting noticing patterns that raise red flags.
Unlike traditional carriers with regulated training, secure packaging protocols, and liability structures, gig drivers operate with less oversight. This increases the likelihood of:
- Packages being left in unsafe locations
- Mishandled or crushed goods
- Stolen packages
- Disputes over proof of delivery
Consumer Preferences Still Lean Traditional
Although Millennials (34%) and Gen Z (32%) are more open to gig delivery, most customers still favor reliability. In fact, 55% of all consumers prefer traditional carriers like FedEx, USPS, or UPS.
Traditional delivery services are associated with:
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Secure tracking
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Professional handling
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Consistent service
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Better insurance and accountability
This shows a clear tension between speed and security in the eyes of today’s shopper.
Gig Economy Risks for Merchants
- Liability & Dispute Management: Gig drivers are independent contractors, not company reps. When something goes wrong—like a lost or damaged package—it’s harder to seek recourse. However, services like InsureShield® Shipping Insurance cover against all modes & carriers in case something goes wrong.
- Brand Reputation: Customers don’t differentiate between a gig driver and the brand they’re delivering for. A single poor delivery experience can lead to negative reviews, social media backlash, or even customer loss.
- Inconsistent Delivery Experience: Gig delivery platforms often prioritize the driver’s experience over consistent service quality. This can result in varying levels of professionalism, timeliness, and communication.
When Gig Delivery Makes Sense
Despite the drawbacks, gig delivery can still be a strategic tool—when used intentionally.
Great Use Cases:
- Local, low-value orders
- Food & beverage delivery
- One-off or on-demand orders
- Urban areas with heavy traffic congestion
High Risk Use Cases:
- High-value or fragile items
- Recurring business clients with high expectations
- Sensitive goods requiring temperature control or special handling
Mitigating Gig Delivery Risks
If your business uses gig delivery, consider these safeguards:
- Clear Delivery Instructions: Use app features to include delivery instructions, especially for apartment complexes or offices.
- Photo Proof of Delivery: Ensure platforms require and share visual confirmation of drop-offs.
- Insurance Coverage: Explore third-party delivery insurance or shipping protection to reduce risk.
- Hybrid Shipping Model: Balance gig platforms with traditional carriers depending on the item, customer, and distance.
- Customer Communication: Be transparent with customers about the delivery method and set realistic expectations.
The Future of Gig Delivery
As customer expectations evolve, so must delivery strategies. Businesses should see delivery as more than just logistics. It's a key part of the customer experience.
With new technology and regulation on the horizon, gig platforms may improve in reliability and accountability. Until then, businesses should think carefully about when and how to use these services. They also must consider what’s really at stake when chasing convenience.
Gig economy delivery is reshaping retail fulfillment, but it’s not a one-size-fits-all solution. The trade-offs between speed and security are real, and the wrong move could hurt your brand more than it helps your margins.
If you're a business owner or logistics manager, now’s the time to evaluate your current delivery approach. Ask: What’s the true cost of convenience?
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