The online retailing industry has grown rapidly over recent years and has practically killed off our high street retailers as online purchasing and home delivery has become the norm, said Brian Regan, Editor of Couriernews.co.uk.
This is due to home delivery companies being able to offer a competitive price to the online retailer and e-commerce businesses to deliver their parcels to their customers within a set time-frame of 1-2 days.
Home delivery companies like Hermes and Yodel, very much rely on what is called a lifestyle courier – someone who has spare time in their daily lives to be able to deliver consumers parcels to their homes within their local community. These lifestyle couriers may average 50+ deliveries within a “round robin” route, thus the carriers pay them an average of 65p per delivery.
With the average price of a home delivery charge being around £3.50 to the shipper these carriers rely on large volumes to cover costs and make profits, hence the use of lifestyle couriers to do the last mile in the delivery process.
If HMRC change the status of a lifestyle courier from self-employed to employed then the carrier will incur additional employment costs which will undoubtedly have to be passed on to the consumer which means in reality the real cost of a home delivery may be in the region of £15 or more.
As such, when Mrs Smith decides to purchase a dress in the sales from Next for £9.95 she will need to add carriage at a cost of £15 making the total cost of the dress £24.99. At this price the chances are it would be cheaper to go to the high street retailer and purchase the dress directly from the store.
For those lifestyle couriers currently working for home delivery companies and are unhappy with their working conditions or pay, they can always choose to leave! As the saying goes, ‘ if you can’t stand the heat get out of the kitchen’. These people joined their organisations with eyes open and fully informed of what was expected of them and what they would get paid, and based with this information made an informed decision as to whether this position was right for them or not.
Online retailing can still grow in its current format but if HMRC decide to challenge the status of self-employed lifestyle courier then this may just be the end of online retailing. We will go back to traditional high street shopping and all the IT and logistics infrastructure in to online retailing and home delivery will be lost.
So the big question is – are we going forward or are we going back, which is it HMRC?