Periodic Reporting for period 2 - DynaHUBS (DynaHUBs is a new application designed to kick start the development of the Physical Internet using a crowd-sourced approach)
Reporting period: 2017-08-01 to 2018-07-31
Meeting the growing urban delivery demand fuelled by growing e-commerce (10% p.a.). Only 30-40% of the population shopped online in most EU countries in 2013, yet they are projected to reach 70-80% in the coming years. Such demand growth will create a need for high urban investments.
- Solving the inefficient last-mile problem for logistics companies. The last-mile problem accounts for a staggering 53-75% of total parcel delivery costs (see Aurum, Credit Suisse, 17 Oct 2016 e-commerce logistics, and Characteristics of innovations in last mile logistics -University of Antwerp, department of Transport and Regional Economics) . Also called a “ping-pong problem”, logistics operators make several empty runs.
- Supporting new business models for low-cost urban mobility.
- Enabling neighbourhood to cross country cargo delivery systems, logistics capacity sharing, car sharing, carpooling, demand-responsive transport, etc.
- Supporting healthy growth of e-commerce by decreasing delivery costs. 68% of e-buyers stated “delivery-related” problems as the core reason they did not complete their orders. Also, 19% of buyers stated that they would shop online more if shipping was cheaper.
- Supporting cross-country commerce across Europe. A third of EU population lives across borders with the ever-growing cross-border daily commute volumes each year. Yet, according to a survey by eBay in UK, France and Germany, 78% of merchandisers identify delivery costs as the main obstacle to cross-border e-commerce, while 42% refer to bad quality of delivery services.
-Promoting higher environmental and safety standards for logistics:
- Decreasing local truck traffic and therefore lowering GHG and CO2 emissions2. Freight transport generates between 20 and 60 percent (depending on the pollutants considered) of local transport-based pollution.
- Lowering fatal accidents caused by trucks. Trucks were involved in an overwhelming total (43%) of bicyclists’ deaths on Greater London roads between 1992 and 2006 (Morgan et al., 2010).
DynaHUBS will address all the issues above at a very low cost and increase the overall efficiency of the logistics sector. We will be among the companies that help European transport system to meet the 2030 and 2050 targets set out in the Transport White Paper.
2.Vision Ready: As reported at the Interim Report, DynaHUBs’ vision has been fine-tuned. DynaHUBs is not to repeat the business and operational models adopted by global giants such as Uber Eat, Deliveroo etc. that are funded with €100s of millions. Instead, it will focus on the gaps left out by these major operators.
3.Market Structure: Over the last 12 months there have been major shifts in DynaHUBs’ market place with many new players powered by multi-billion dollar valuations battling each other. This is a new commercial reality that DynaHUBs cannot ignore. Consequently, we made significant advances to adapt to this new environment. This will be explained further.
4.Innovation: We have identified the right niche among the big players. As our evaluator also points out, DynaHUBs has been able stay as an innovative Project despite the major shifts in the market and technology. .
5.Product Ready: The product development cycle has been completed. Currently our product can operate with a real price advantage compared to the global giants. For example, Uber charges €4.95 for a delivery where our costs to user is €0.75. This is because DynaHUBs does not need to carry the cost of a professional driver or courier network like Uber and others.
6.Simple UI/UX: The UI/UX of DynaHUBs has been designed to work with “Don’t Make Me Think” principal. For this we have adopted the methodology named “Hooked” developed by Nir Ayal.
7.State of the Art Technology: The combination of UI/backend and the vitality of the application are achieved with 75% reduction in transaction steps. This is the most significant achievement of the project from a technological point of view. There is no other exchange mechanism peer-to-peer or otherwise that utilizes our novel design.
8.Disruptive: With strong viral and peer-to-peer features DynaHUBs aims to challenge the market by changing the rules of the game- not for the whole market but for a small niche where it can demonstrate the difference.
9.Already in Apple and Google Stores: DynaHUBs has only been tested in small FOTs. The application is already in App Store and Google Play. This is allowing us to conduct tests in real life conditions instead of depending on focus groups using the test version of the app.
10.Reducing congestion: DynaHUBs makes use of existing vehicles that are already going from point A to B. Therefore, does not add extra vehicles on the road.
11.Resilience and Emergency Relief: Our FOTs have shown that during natural or man-made extreme events public can use DynaHUBs when the public transportation and delivery systems fail. We have already conducted tests in a real flood in Istanbul as we have incorporated experiences from a snowstorm and terrorist event of a car-pooling test into DynaHUBs as well. We are currently doing scenario planning and gamification related work with a number of relief agencies, first responders, and civil protection agencies in Europe. Over the next year we plan to add IoT capabilities.
12.Volume is Key to Customers: Market and user needs were established for Lead Users. DynaHubs operates as a market exchange where senders and messengers have to be in large volumes. DynaHubs has been able to identify such volumes in i) existing car-pooling communities and ii) emergency and relief agencies that operate respond to extreme events man made or natural. The most obvious business potential is in by integrating last mile delivery capability with high parcel volume of e-commerce companies. However, this also requires a lot of trade marketing effort and budget. There’s no innovation in this part of the business model. It’s easy to establish but quality assurance is more challenging. So even though it looks like a secure source of volume, it also brings a lot of liability regarding business quality level, safety and insurance matters etc. This wouldn’t be our first go to market strategy due to our limited budget.
13.Multi-Model Transportation: DynaHubs can be part of in a multi model transportation-logistics suite. The users can use DynaHubs in parallel with their other applications such as carpooling, car sharing, taxi sharing, and public transportation applications. There are many MaaS and Resilience related commercial projects that we can become part of. We have already tested DynaHubs with Uber, TAG, Moovit and Yandex. This means users can act like messengers and carry packages while using these apps.
This is beyond the scope of the state of the where we aim to establish a commercial model for DynaHubs to work with local transportation authorities and first responders.