An Uber Eats e-bike sits outside the Sugar & Spice Thai restaurant in Cambridge’s Porter Square on Sunday. (Photo: Marc Levy)

Third-party delivery services such as Grubhub, DoorDash and Uber Eats are ubiquitous, with drivers shuttling takeout and groceries throughout Cambridge for time-strapped residents. They’re also as expensive as they are convenient.

According to data from McKinsey & Co., a consulting firm, Americans pay 40 percent more for takeout when they use third-party delivery services, while restaurants pay a 15 percent to 30 percent fee when these services deliver their food. For seniors and other vulnerable residents, many of whom relied on delivery services during the pandemic, it can be too much to stomach.

Cambridge thinks it might have an answer. To alleviate the burden of steep delivery fees, the city is thinking about subsidizing cargo e-bikes for local businesses, essentially moving delivery services in-house for neighborhood shops.

“The program we hope to offer would provide an alternative to high third-party service fees,” said Paradis Saffari, director of economic opportunity and development at the Cambridge Community Development Department, the city’s planning agency.

Annie Shawn, communications manager for CDD, called the e-cargo bikes more environmentally friendly than cars often used by third parties for delivery and primed to “benefit from the continually expanding network of protected bike lanes across the city.”

It will be a while before local delivery riders are zipping around on city-bought bikes, if at all. At this point, the program is more of a dream than a plan. “We are still vetting the program, meaning it is in the very early stages. There are many steps ahead,” said Susanne Rasmussen, director of environmental and transportation planning at CDD. “However, we believe our current direction is promising. It has the potential to directly benefit local businesses and aligns with our climate and transportation goals and initiatives.”

Evolving concept

Though CDD has settled on e-bike subsidies as its chosen strategy, Cambridge considered a different option first in the battle against delivery fees.

In August 2022, the City Council passed a policy order directing the city manager to “develop a pilot program in which the city would purchase e-bikes and hire city residents to create a city-based delivery service.” These city-employed riders would have shuttled goods from businesses to consumers like private third-party services but, presumably, for free or at low cost.

The policy order expired at the turnover of the council after elections, without CDD developing the requested test.

According to Rasmussen, the department thought a lot about the order but ultimately decided a pilot didn’t make sense.

“We spent time researching and thinking through what type of program would result from it but didn’t proceed beyond that for a couple of reasons,” Rasmussen said. “It is not a function of our city to be the operator of a delivery service.”

Even before the policy order, Saffari added, CDD had been thinking about a subsidy program, which, unlike a city-run delivery service, “gives businesses more control over how they manage deliveries.”

Similarly, by helping businesses build up their own in-house delivery service, the city could help strengthen those businesses, Saffari said.

Boston delivers on Boston Delivers

Councillor Sumbul Siddiqui, who sponsored the policy order with former vice mayor Alanna Mallon, said that the council hasn’t received a report back, but that she trusts city staff to make the right call, even if the final program deviates from the council’s order.

“I trust the CDD to figure out what they think is logistically easier,” Siddiqui said. “It would probably be challenging to do our own city-based delivery service.”

Implementing a city-run delivery service might not be as difficult as the department thinks: In September, Boston launched Boston Delivers, a program similar to the one proposed by Cambridge’s council, but with a tweak.

According to Harper Mills, the program manager for Boston Delivers, instead of employing drivers directly, Boston partnered with Net Zero Logistics, a final-mile delivery company, to test a cargo e-bike delivery service in Allston. Net Zero handles the day-to-day logistics, while the city subsidizes the deliveries and recruits businesses to use the service. Net Zero tailors the program to each local business, often integrating their service with existing delivery platforms.

The opposite route

Boston’s reasoning went the opposite of Cambridge’s. At the start of its planning process, Boston Delivers considered subsidizing cargo e-bikes and loaning or giving them to businesses, then decided against it. Rather than giving businesses bikes and letting them figure out the rest, she said, Boston Delivers thought an end-to-end service would be more useful. They couldn’t be sure every business would have an employee willing to ride the bike in an era of significant labor shortages.

“There’s just too much of a barrier,” Mills said of subsidizing bikes, though she did say that e-bike subsidies likely offer more flexibility to businesses.

The test seems to be a success: Boston Delivers is expanding this month to surrounding neighborhoods, and serving more businesses.

Putting on the brakes

About partnering with a third-party delivery service like Net Zero Logistics, Rasmussen said, “Partnering with a third-party service would effectively make the city the operator, so that was not a viable option for us.”

The model can be complex. A nonprofit version called Cambridge Bike Delivery was tried in 2020 by members of the Cambridge Bike Safety Group to make home deliveries of medicine and groceries during the extended Covid pandemic lockdown. Connecting seniors with stores lacking delivery services such as Skenderian Apothecary, Inman Pharmacy and Pemberton Farms “proved to be tougher than anticipated,” organizer Rebecca Neuman said. “We had over 300 cyclists, but it was hard to line people up on dates and times.” Outreach to the elderly became something of a challenge as well, and the effort waned.

Volunteer bicyclists were prepared during the Covid pandemic lockdown  to make free deliveries from any Cambridge or Somerville business. (Photo: Cambridge Bicycle Safety via Facebook)

A second iteration of food pantry deliveries from the Agassiz Baldwin Community Center and Margaret Fuller House in The Port neighborhood went better. For a time during the pandemic, Neuman said she was looking for other ways to use the volunteer army of riders.

The experience from a local businesses that did bike delivery challenges both the Cambridge and Boston models.

Robert Gregory, who owns Redbones Barbecue a couple of blocks from the North Cambridge line in Somerville’s Davis Square, tried delivering by bike in the 1990s, but phased it out because cars can carry many more orders and, therefore, yield drivers more money. He ended his in-house service – which was before the age of readily available e-cargo bikes – and now delivers exclusively through third-party apps.

“It’s economic. They couldn’t make enough money. They couldn’t get to enough places,” Gregory said of bike-riding deliverers.

The third-party delivery apps have huge reaches, with drivers who will travel farther than any in-house delivery service could, Gregory said, and when Redbones delivered on its own, it serviced only Somerville.

How much would it cost?

Because CDD has only started to hash out what an e-bike subsidy program would look like, a lot is still unknown, such as how much the program would cost, how much the city would discount each bike and if demand exists. Because other cities are pioneering e-bike subsidy programs, there is some data to consider.

While cheaper than cars, cargo e-bikes are still expensive, ranging in price from $2,000 to $9,000. The average costs $5,000, according to a white paper from Cameron Bennett and John MacArthur of Portland State University; Christopher Cherry of University of Tennessee, Knoxville; and Luke Jones of Valdosta State University. Yearly maintenance costs add up, on average, to $400.

The Somerville shop Bicycle Belle has 10 cargo e-bike options from $2,500 to $9,300.

Vermont leads the way in e-bike incentive programs. It plans to offer up to $2,500 for businesses to buy cargo e-bikes, according to the Transportation Research and Education Center at Portland State University, where Bennett and MacArthur research. The state earmarked a total of $150,000 for the program, in which individual consumers can participate. Vermont’s Burlington offers its own $200 voucher to any resident buying an e-bike, including on behalf of a business.

Washington, D.C., has a similar program in the works. The Council of the District of Columbia, the district’s legislative body, is considering subsidizing $700 of a business’ cargo e-bike purchase.

In Canada, British Columbia and Prince Edward Island have subsidy programs, awarding from $400 to $1,365.

Most incentive programs offer businesses between a few hundred and a few thousand dollars. None pays for the bikes outright.

Cambridge has experience buying cargo e-bikes in a different context. As a part of a 2022 participatory budgeting process, an e-bike tree watering program won $25,000; the city bought four cargo e-bikes. Starting last summer, the city hired college students to ride around on the bikes and water the city’s trees.