Jia Zhang, a Doctoral Researcher at the University of Antwerp, received the Best Poster Award at the VREF 2023 Urban Freight Conference in Gothenburg last week for her research on the societal cost of parcel deliveries in urban freight. The societal costs are environmental issues and impacts on inhabitants and are also related to poor labor conditions.
Jia found that subcontractors’ working conditions receive little interest in research (and in practice), and their welfare loss is not counted as an external cost of urban freight. There is a lack of a regulated pay structure for urban freight subcontractors.
Parrott and Reich (2018) calculated an average pay gain of 14% for an individual Uber/Lyft driver by proposing a legal minimum pay standard compared to the actual pay of the drivers in NYC. Henao and Marshall (2019) reached the realistic earning and expense levels of Uber/Lyft drivers’ with Colorado’s minimum hourly wage, revealing a 26.6% loss of earnings for the drivers.
Jia compared the cost structures of logistics service providers with the proposed (legal) standard one. She calculated the loss of welfare of subcontractors and proposed potential regulatory interventions to mitigate the identified societal impacts. The overall results show a 2% difference. However, density and volume play an important role in real-life parcel delivery costs on the level of the individual driver. This is a topic for further research.