Call It Franchising 2.0. The tech industry is setting its sights on the little guy, looking to turn ambitious go-getters into small-business owners. Tech companies provide the tools and support; you supply services.
Bedeviled by last-mile delivery costs, Amazon began enabling entrepreneurs to launch their own package-delivery hubs this summer. Starting at a relatively modest $10,000, “delivery service partners” can lease fleets of 20 to 40 Amazon-branded vans. (A KFC, by contrast, costs $1 million to open, plus a one-time $45,000 franchise fee.) The ecommerce giant negotiates deals on vehicles, uniforms, fuel, and insurance; the entrepreneurs hire and manage their own employees. Earnings are based on the number of Amazon vehicles leased, length of route, and number of successfully delivered packages.
In August, Austin-based e-scooter startup Goat announced its own guerrilla franchise model. Bootstrappers can buy scooters from the company for $595 to $999 apiece—plus insurance ($20 per scooter per month), permits (around $5 per scooter per month, depending on the city), and maintenance fees. The minimoguls handle scooter drop-offs, pickups, charging, and trips to the repair shop, while Goat manages the software for a 15 percent cut.
The companies claim participants can make up to $10,000 per scooter (Goat) and $300,000 per fleet (Amazon) in profits a year. But these indie owner-operators are still beholden to The Man for business and pricing. “Your destiny is tied to the 800-pound gorilla that controls how big you can get,” says Columbia Business School professor Jeremy Kagan. Still, for self-starters willing to take on the risk, that local delivery route may be just big enough.
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