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Cargo-bike delivery: zero emissions, but who pays?

Thursday, December 1, 2022

Last-mile delivery by cargo bike may have found a sustainable business model, which may mean this zero-emission solution might stick around.

The pandemic accelerated the move toward e-commerce. This increased activity online has lead, unsurprisingly, to an increased demand on last-mile solutions, which has in turn spurred problems of congestion, increased emissions, and strain on the transport system. Another way to put it is that home delivery, which is often ‘free’ for the customer, incurs costs to the city and environment that are hidden.  

One of the many last-mile solutions proposed and enacted in various cities around the world, is the cargo-bike. These bikes are quiet and have no operational emissions. They use bike lanes and so don’t contribute to congestion. Perfect solution right!? Not quite. The article points out that this last-mile has two key weaknesses: they require an additional transition point for packages, and they have limited payload capacity.

These two limiting features, plus the fact that cargo-bikes require a person to operate them, makes them prohibitively expensive. So much so that most of the actual implementations have relied on grants and subsidies or explicit regulatory demands. But such funding sources are not sustainable, and many of the projects have had to shut down when the funding dries up.

The article proposes a way forward: a tax on home delivery that partly funds cargo-bikes. The suggestion is that this would follow how tourist taxes work, where tourists pay a tax through accommodating providers that in turn fund regional activities to maintain infrastructure and environments for tourism. In essence it is a suggestion to make the hidden costs visible and distribute that across those who want home delivery.

Personal Comment:

The article raises several important points. First, as the saying goes, there is no such thing as a free lunch. Free home delivery is, of course, not free at all. Not only does it cost the delivery company time, money, and other recourses, but it impacts streets, neighbourhoods, and the environment. Not all those impacts are negative, it should be pointed out, as many find employment delivering packages. Second, sustainable business models are essential for sustained development. We cannot neglect business models if we want transportation to be more sustainable. Long-term refinement, efficiency, and improvement requires funding. Third, to some reasonable degree those who want any particular convenience should pay for it. By passing on the costs of home delivery to the company and the society people are enjoying a convenience without paying for it.

The difficulty of funding a low-emission delivery option like cargo-bikes raises the question of differed or hidden costs. But it should be pointed out that the standard diesel- or gas-powered delivery vans incur even higher hidden costs, despite their relative lower costs to the delivery company. At the very least this issue puts a question mark over the ‘free’ in free home delivery in whatever form.

Regardless, it is not clear to me that cargo-bikes are the only solution. It may well be that their inherent limitations are a sign that they should be abandoned as a general solution to last-mile delivery. Is it worthwhile to install the rather complicated tax scheme suggested to ‘save’ cargo-bikes as a solution? Perhaps, but perhaps not. Whether it is cargo-bikes, delivery robots, autonomous trucks, or even pressurized tube delivery systems, the last-mile challenge is one that we as a society need to address.

Written by Joshua Bronson,
RISE Mobility & Systems