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Editorial: Hermes gets caught up in sharing economy tensions


Last month I wrote about the phenomenon of the Daily Mail moment. Back then I was talking about Sports Direct, but this week it’s been the turn of Hermes.
Only it wasn’t the Daily Mail, it was the Guardian.

The accusations and criticism being levelled at Hermes are likely to ring a familiar bell for many people, and centre around the issue of using contractors and the self-employed – lifestyle couriers being one of the foundations of the delivery sector.

According to the Guardian piece, which you can find online without too much trouble should you want to, some Hermes couriers are earing below the statutory National Minimum Wage of £7.20 per hour. A simple division of the amount paid to do the job by the length of time to carry it would appear to be at the heart of that calculation.

According to Hermes, “the Guardian article focused on the fact that a small number of couriers receive less than the living wage which we believe to be disingenuous. Our records prove that on average our network of 10,500 self-employed couriers receive the equivalent of £9.80 per hour, 36% above the National Living Wage of £7.20. This figure takes into account any expenses the couriers may accrue but does not include any other revenue they earn from other sources, as being self-employed means they are not tied to working exclusively for us.”

Allegations abound from low pay to the inability to take holiday (because there’s no one to cover the route), through to potential tax liabilities.

I asked Hermes about the proportion of its lifestyle couriers who have contracts in place with other companies, but was told that information was not available.

As most self-employed people will know, one of the litmus tests for assessing whether you are actually self-employed or not is whether you work for more than one customer – this is, at any rate, how Her Majesty’s Revenue & Customs regard things.

Here, again, we see the tensions that exist in a new employment era. The growth of the on-demand economy (which the Guardian refers to as ‘the gig economy’ and which is also known as the sharing economy) is only going to increase those tensions. Customers don’t care if the courier is self-employed (as is often the case with Hermes, Yodel and others) or on the payroll (as in the case of Royal Mail, UPS and others). They care about the service they get and how much it costs them.

As delivery firms compete on both those fronts there is an ever growing need to be smarter about the way you deploy your people and spend your money. Finding slack in your asset base and sweating it is vital, as is cutting dead any non-productive costs.

This issue doesn’t belong to Hermes. It doesn’t even belong to the delivery sector. But it isn’t going away any time soon.

Elsewhere in eDelivery, June was a funny old month, wasn’t it? What with all that rain and that referendum we had. Still, even with all that going on, online retail sales remained very buoyant, recording a 17% improvement on June last year, according to IMRG.

More positive ecommerce news comes from Southern California, where it’s even sunnier than it currently is in the UK. In a deal worth $1bn, Unilever has bought five-year old Dollar Shave Club. That’s the third largest ecommerce acquisition deal ever. Will the member-based approach to ecommerce be the next big thing..? Maybe, but that’s for someone else to worry about.

Health-food store Holland & Barrett is teaming up with InPost – just think how fit and healthy you’ll be if you jog to your nearest locker bank … it’s probably only a couple of miles away, you know.

Because there’ll be no escaping it until someone resolves it once and for all, we have a guest authored article on Brexit this week – does it really spell doom and gloom, asks Paul Galpin, MD of P2P Mailing.

Regardless of how gloomy or how healthy you feel, if you’ve got something to say on any of the stories in eDelivery or have an idea to share, please get in touch. And if you haven’t subscribed to eDelivery yet we’d love it if you did. You’ll get a weekly newsletter summarising the main stories we’ve covered, and we’ll keep you informed of other big announcements. You’ll find details on subscribing here. And if you’re not receiving a copy of the magazine you’ll find details on that too.

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