Thuan Pham, who in May stepped down as Uber’s chief innovation officer and longest-serving magnate, has a brand-new job in South Korea. Coupang, the country’s biggest e-commerce business by market share, announced today it has hired Pham as its brand-new CTO.
For Pham, signing up with Coupang, a SoftBank-backed unicorn that holds a 24.6% market share in South Korea, the fifth-largest e-commerce on the planet, is a departure from his original post-Uber strategies. In an interview with Bloomberg after leaving Uber, which Pham joined in 2013, he revealed relief about his choice, explaining leading the ride-hailing giant’s technology department as “a really heavy concern.” After leaving, Pham meant to spend his time teaching university trainees and mentoring business owners instead of signing up with another large tech business.
“I believed that there was a slim opportunity that I would take on another operational function once again, however the bar for that would have been incredibly high,” Pham informed TechCrunch. “It had to be much more interesting than what I did at Uber for me to leap in.”
After fulfilling Coupang chief executive officer Bom Kim, who founded the business in 2010, however, Pham stated he was captivated by the opportunity to use his experience at Uber to a business in various sectors.
Coupang is understood for its very fast delivery services. This consists of Dawn Delivery, which drops off plans at customers’ doors before 7 AM, consisting of fresh groceries if purchased by midnight. It is currently readily available in Seoul, where Coupang is headquartered, and a number of other cities. Pham said Coupang’s ability to ensure early morning shipment was a significant hook.
“I thought, holy smokes, this is truly innovative. Possibly it’s not technology innovation, but it’s a company development, and naturally, technology has to allow that at scale,” he stated.
Pham said he wasn’t interested in operating at another ridesharing business, but “a great deal of the ideas are similar” in on-demand e-commerce. For instance, both have to route chauffeurs to pick up passengers (or, in Coupang’s case, plans) and drop them off as effectively as possible, and both require to utilize vibrant pricing to react to requirements and supply, which Pham stated is especially pertinent to shipments of fresh groceries.
“There are many difficulties that you have to fret about, from the skilled perspective, innovation point of view, logistics process perspective, and so on,” he said. “I figured many things I found out at my previous business might really be used to help, despite the fact that it’s a different domain.”
In spite of Coupang’s position as the biggest e-commerce gamer is among the world’s biggest e-commerce market, Pham said he thinks the business is “still in the very early days.” For example, there are chances for building out its logistics infrastructure, inventory, and verticals, including its third-party marketplace, which includes storage facility and fulfillment capability for sellers.
Pham, who recently invested 5 weeks in Seoul prior to returning home to California, rode along on a night shipment shift to get a feel for how Coupang’s logistics chain works. One thing that impressed him was the density of Seoul, which creates unique difficulties and opportunities for on-demand e-commerce business there.
“We have a couple of hundred items on the truck and the truck was in an extremely small radius location. Often we enter an apartment and we deliver to 2 or three homes in that building,” he said. “That sort of density is a substantial advantage for a logistics company, compared to where I live in the U.S.” [A Coupang representative said the company frequently delivers several dozen, or an entire truckload of packages, to one building]
Using tech to address working conditions
After it was introduced 10 years ago, Coupang at first counted on third-party carriers before building a network of internal fulfillment centers. This consisted of in-house trucks and drivers described as “Coupang males” ( now called Coupang Buddies since the business also utilizes female shipment motorists) who likewise acted as customer care agents.
As the company scaled up, however, it started relying more on third-party logistics service providers once again. Pham stated Coupang presently uses 10s of thousands of full-time workers for delivery but also counts on flex workers in order to meet spikes in demand, for example during vacations. This is among the locations where Pham stated his experience at Uber can benefit Coupang.
“A bunch of the things I worked on and the issue I resolved at the previous company is relevant due to the fact that everything there was flex,” stated Pham. “However here you have a set of workers who are on-demand if you will, and how do you make sure that the correct incentives are there? If you have a big need and insufficient capability, then you have to pay a higher cost for people to take those jobs, those routes, and those time blocks.”
However, for many businesses whose company designs are developed around on-demand services, the convenience for consumers can come at a cost for workers. Like Uber and Amazon, Coupang’s working conditions have also come under attack, specifically as the COVID-19 pandemic dramatically increased demand for deliveries.
Throughout the pandemic, Coupang has been slammed for refraining from doing enough to prevent infections at two of its logistics centers. Working conditions at it and other logistics companies, consisting of CJ Logistics, came under scrutiny after worker deaths, which labor groups attributed to overwork (in action, a Coupang official told the Korea Times it’s delivery and circulation center workers are all restricted to working 52-hour weeks).
[In a declaration to TechCrunch, a Coupang representative said, “Coupang owns and operates the biggest fleet of shipment trucks and delivery people in Korea. We have rigid safety protocols that we abide by. We, in fact, doubled our variety of chauffeurs during COVID due in large part to our security procedures which kept our drivers and clients safe.”]
Pham said that Coupang has spent greatly on COVID-19 security preventative measures, including disinfectants, increasing the spacing of goods in its warehouses, and utilizing automated systems to track, pick up and pack the inventory to preserve social distancing.
To improve working conditions for shipment workers, Pham stated the business is continuing to hone the algorithms that direct motorists to clients’ addresses.
“I know this firsthand from Uber, that the clearer the routing direction, the less tension it puts on chauffeurs psychologically,” Pham stated.
While riding on an overnight path with a shipment chauffeur, for instance, he understood there is room for enhancement in Coupang’s package sorting system, so drivers spend less time searching in bins for small packets when they reach their destination.
Pham said that eventually, he thinks Coupang’s innovation can give motorists more control over what they do during their shifts, either decreasing their work or, in the case of flex employees, enabling them to carry out more shipments to make more cash.