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Will Kanga Solve the E-Commerce Last-Mile Delivery Problem?

By Patrick Nelson – Feb 22, 2014 at 7:37AM

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Speedy delivery could be a major differentiator that places small, local businesses at an advantage when compared with larger e-commerce supplier with their warehouse-oriented delivery mechanisms.

You've heard of Amazon's (AMZN 4.46%) Prime Air, an unmanned aerial vehicle, or drone, delivery service R&D project that Amazon hopes one day will get packages from the monolith to customers in less than 30-minutes.

Well, there's a reason a vendor like Amazon is taking a good hard look at ways to improve the delivery mechanisms. Local delivery is the one part of the commerce picture that hasn't changed much since the days before e-commerce. It is, as it has always been, a man or woman driving a van, avoiding parking tickets, lugging boxes around all day.

In e-commerce it's called the "last mile." Last mile in distance, and last mile in that it's the last bit of the e-commerce puzzle.

We've got the warehouses and websites streamlining our consumption choices. Delivery, despite the hand-held terminals and smart logos, is still in the dark ages. It's still hard to get what you ordered, same hour, or even same day from major players like Amazon.

Local businesses, however, may have an advantage here over the monoliths. They're already nearby, for one, and possibly have the stock you want. We've used them for years for flower delivery, pizza, and to a certain extent, groceries.

Beating the large e-commerce players

What if local businesses could take advantage of technology to get one up on the major e-commerce players? One idea that may help them is the crowdsourcing of delivery drivers.

A company called Kanga reckons it's got the model down. Its idea, launching soon, is to let local drivers bid for delivery service jobs on a per job basis.

Kanga says it has just closed its seed round funding, raising $1 million, and plans to launch in Atlanta at the end of March.

Some consumers perceive advantages to dealing with local businesses, partly in perceived carbon footprint reduction, but also in supporting the local economy.

Kanga app screen shot - Kanga

Kanga's system is based around an iPhone smartphone app that is used by the shipper and the driver. The shipper offers a rate that he or she is willing to pay for the job, and then signed-up drivers bid. The shipper then browses the driver profiles and chooses the driver.

Like taxi app Hailo, where taxi drivers pick jobs on a simple smartphone app, rather than more cumbersome centralized dispatch process, drivers can start delivering with their own vehicles as soon as they've signed up and installed the app.

Casual drivers can plan around their existing journeys and make some money at the same time. More serious carriers can upgrade to a special tier.

An open API is available, which allows for integration in a POS, point of sale, system. Routing status is via web interface. An Android app will be available later.

Crowdsourcing disrupters

Speedy delivery could be a major differentiator that places small, local businesses at an advantage when compared with larger e-commerce supplier with their warehouse-oriented delivery mechanisms.

Connecting individuals, drivers, and retailers for local shipping needs, Kanga is looking to change that last mile.

Patrick Nelson has no position in any stocks mentioned. The Motley Fool recommends The Motley Fool owns shares of We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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