For about $8 in Manhattan, Amazon will have a bike courier deliver your groceries, toys, and toilet paper in under an hour.
John Morgan, who teaches at UC Berkeley’s Haas School of Business, says Amazon can pull this off because of its sheer scale. Other companies tried and failed during the dot-com boom for this kind of instantaneous delivery, and a host of start-ups are now trying to get into the game – companies like Instacart and Uber.
But John Deighton, a Harvard Business School professor, says they are making a mistake by focusing on delivery, not product.
In the end, says Josh Bivens of the Economic Policy Institute, the success of super-fast delivery rides on an army of cheap contract workers. Bivens says a healthy labor market would make instantaneous delivery more expensive and a harder business model.
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