Outsourcing the last mile: Should regulation be strictly focused on the urban segment?

Because of the development of e-commerce and the reduction of the shipments'size, the parcel delivery sector is growing rapidly. However, faced with the constraints of urban cities (parking, congestion, delivery density), the parcel delivery groups have chosen to outsource their urban deliveries. This enables them to reduce payroll costs but also implies consequences for urban subcontractors such as economic dependence. However, outside the city, when urban constraints no longer apply, subcontractors who work in long-distance inter-urban freight transport seem less affected. The article questions the pertinence of the scale of subcontracting regulation. Should it be strictly urban as suggested by the difference of consequences for urban and inter-urban subcontractors? The paper highlights the large number of variables that could affect subcontractors' dependence and the complexity of public decision making in the urban transport sector.

Highlights

 Parcel delivery groups massively outsource urban deliveries  Urban subcontracted drivers are economically dependent on their principals  Outside the city, subcontractors are less dependent.  Public authorities may take decision at a strictly urban level to regulate subcontracting  Public authorities can consider other variables that affect subcontractors' dependence

Introduction

Freight demand has considerably changed in the past decades. To keep their stocks at a minimum, shippers require more frequent deliveries of smaller consignments [START_REF] Guilbault | Transport and Logistics Demand: New Input from Large Surveys of Shipper in France[END_REF]Gouvernal, 2010, Hesse and[START_REF] Hesse | The transport geography of logistics and freight distribution[END_REF]. To respond to this changing environment without skyrocketing transport costs, freight firms have, in turn, restructured via outsourcing, subsidiary formation and firms' networks. Most economists approach these restructuring strategies in terms of the minimisation of transaction and production costs [START_REF] Williamson | Comparative Economic Organization: The Analysis of Discrete Structural Alternatives[END_REF], or as an intend to maintain coherence compared to an expensive diversification [START_REF] Dosi | Understanding corporate coherence: Theory and evidence[END_REF], or as contract incentives, according to the theory of agency [START_REF] Ross | The Economic Theory of Agency: The Principal's Problem[END_REF]. These theories focus on the decisions of the lead firms that implement restructuring strategies. At the end of the chain, the subcontractors are thus considered as free agents who voluntarily agree with these decisions.

As regards more interdisciplinary works, such as those on Global Value Chains (GVC) (Gereffi and Korzeniewicz, 1994;[START_REF] Gereffi | The Governance of Global Value Chains[END_REF], they are also mainly concerned with lead firms and the reasons for and the implementation of, their decisions, eluding the strategies of the subcontracting firms. Perhaps this is starting to change, as recent GVC work [START_REF] Taylor | Putting Labour in its Place: Global Value Chains and Labour Process Analysis[END_REF] take other factors as labour process analysis into account.

This article aims to be a further step in this direction, by focusing on the impacts of outsourcing on subcontracting firms. Former studies have demonstrated the impact of outsourcing on skills and wages by comparing working conditions in different economic sectors. Individuals working in subcontracting firms tend to be less skilled [START_REF] Feenstra | Globalization, Outsourcing, and Wage Inequality[END_REF] and less well paid [START_REF] Berlinski | Wages and Contracting Out: Does the Law of One Price Hold?[END_REF][START_REF] Perraudin | Inter-firm dependency and employment inequalities: Theoretical hypotheses and empirical tests on French subcontracting relationships[END_REF][START_REF] Flecker | Organisational restructuring and emerging service value chainsimplications for work and employment[END_REF] than those working for lead firms.

In the same vein, this article examines the impacts of outsourcing on subcontracting firms but through a more local and finer length. Focusing on road freight transport it investigates lead firms' decisions and their consequences by putting emphasis on the geographical distinction between (intra)urban and inter-urban (long distance) transport segments. The economic, social and environmental consequences of the two transport subsectors are analysed. Our findings show important variations and suggest the need for incorporating this heterogeneity to determine the relevant scale for policy and regulation.

The characteristics of road freight firms may vary depending on the geographical segment in which they operate. The intra-urban segment is dominated by large transport groups specialised in parcel deliveries whose networks are particularly well suited to rapidly convey small consignments. Within urban areas, freight transport is subject to severe constraints [START_REF] Merchan Duenas | Transshipment networks for last mile delivery in congested urban areas[END_REF], both regulatory (in terms of CO2 emissions, compatibility of delivery times, traffic or parking restrictions) and operational (related to the density of deliveries and traffic).

Thus, the urban delivery rounds carried out by delivery drivers are particularly costly. In this context, outsourcing deliveries allow the large parcel delivery companies to save on costs.

However, the proliferation of small companies working outside the rules and under the pressure of large parcel delivery groups create problems unsolved since the late 1980s. Illegal work, the precariousness of delivery drivers [START_REF] Strauss | Towards a geography of precarity?[END_REF], high accident rates and the use of old polluting trucks are all symptoms of this that public policies can only address on the basis of sound and precise knowledge of the organisation of urban freight transport.

Are these issues specific to the urban segment? In other words, when urban constraints no longer apply, are the consequences on subcontractors lower on the inter-urban segment? If this is the case, the policy decisions to assist subcontractors, to regulate subcontracting relations and to protect investment in electric trucks may be more effective if implemented at the local level.

This article takes the case of France as an example to show the complexity of transport regulation for public authorities since several other factors may affect economic dependence and since different types of consequences of this dependence could impact subcontractorswhich can involve national issues needing broader regulation.

The first section presents the French road transport regulation based on national agreements and local rules (2). Then we discuss our methodological approach based on desk research and field survey conducted with freight transport operators in France between 2012 and 2019 (3).

In the following sections, we present the results (4). We show the type of dependency experienced by urban subcontractors (4.1), their consequences (4.2), and analyse this dependency in the case of inter-urban transportation (4.3). There is a distinction between short and long-distance subcontracting that suggests regulating only at the urban level. Then, in the discussion, we show that this does not seem to apply in every situation (5). We thus reconsider the distinction between urban and inter-urban transport with reference to technical criteriasuch as the specific nature of the vehicle, the type of goods transported, the organisation of transportand economic criteriasuch as the size of the subcontracting companies or the opportunities in terms of customers.

French regulation in road freight transport: national and sectorial rules

In a constant effort to foresee and adapt to the requirements and needs of the shippers for whom they work, transport operators attempt to minimise their costs. This effort is particularly directed at the management of the driving and delivery workforce, and transport is one of the sectors that makes the greatest use of subcontracting, above all for its core activity. Therefore, in 2001, a specific national regulation of subcontracting has been implemented. Relationships between delivery drivers and their employers are henceforth governed by two types of contract according to the drivers' status.

On the one hand, the national collective agreement on road transport of 21 December 1950 1 is in force for salaried drivers. It fixes the minimal wage for drivers, severance pay, rests breaks, annual paid leaves, family leaves and diseases' leaves.

On the other hand, self-employed drivers are not subjected to this convention. A national framework contract 2 implemented in 2001 regulates their relations with their principals (firms that engage subcontractors). The terms of this framework contract stipulate that the principals' directives must not be considered as proofs of a salaried link. Therefore, it prevents parcel delivery groups against the risk of self-employed drivers being reclassified as employees.

In France, the ESANE surveys indicate that the subcontracting rate in the transport sector was the highest of any sector of the economy between 2009 and 2011: 22% compared to 14% for agriculture, 8% for manufacturing or 18% for construction (Perraudin et al., 2014, p. 137).

However, the subcontracting rate is not the same for all road freight transport subsectors. The subcontracting rate for transport excluding parcel delivery services and chartering is capped at 15% 3 . In other words, a carrier may not make more than 15% of its turnover via subcontracting.

To outsource more than 15%, the carrier must establish itself as a freight forwarder, which requires a diploma called "professional capacity". This is the status parcel delivery groups have chosen. They all are freight forwarders. This legal limit means there is a de facto difference between the volumes of freight that are outsourced in parcel delivery services, as shown in Table 1. working as employees of parcel delivery groups or of their urban subcontractors have shortened driving times than inter-urban firms' employees. Thus, the incentive to bypass legal driving time by replacing employees by self-employed workers is higher for urban firms.

Scheme1. Transportation chains and regulations for urban and inter-urban sectors

This set of legal rules for urban and inter-urban transports (summarised in scheme 1) seem to favor urban subcontracting with limitless driving times for self-employed drivers.

Our field study aims at describing precisely the different forms of subcontracting within these two transport segments and their consequences on delivery drivers. With this comparison, we hope to highlight if these consequences must be treated differently in urban areas. Should and could public authorities adapt these legal rules that are less restrictive for urban logistics?

Should they implement binding policy decisions to offset this light urban regulation?

Research approach

Since the end of the 1980s, France has chosen to deregulate road freight transport by cancelling the compulsory tariffs and the quotas of transport permits. During the 1990s, concerned about the fate of very small firms, French transport department built a price indicator and launched regional empirical survey via its regional transport department [START_REF] Violland | Deregulation of road freight transport. The french experiment [La dérèglementation des transports routiers de marchandises. L'expérience française[END_REF]. They showed the alarming economic situation of subcontractors, economically dependent and vulnerable because of ever lower prices. But since 2000, the lack of concern on the part of regional and national governments is reflected in the poverty of national statistics concerning transport outsourcing.

In France, the sector is divided into several sub-sectors (named in table 1): in addition to the "truck rental with driver" category, "urban transport", which has an urban or local character and which involves delivering goods over short distances, is distinguished from "inter-urban transport", regular or not, over long distances and internationally. It is immediately apparent that the statistics combine "local" and "urban" and include the concept of "delivery time" in their definition of local transport. Inter-urban transport, on the other hand, is defined only by the length of the journey. Parcel delivery services are a third sub-sector defined separately as "the collection of multiple shipments (consolidation) of less than 3 tonnes which are grouped together on platforms to form full loads for transport vehicles and breaking bulk on the platform of the receiving centre and delivery to the recipient's home" (INSEE 5 ). This artificial delineation, which is of course necessary for establishing macroeconomic categories, does not provide an accurate picture of differentiated transport organisations that are based on multiple, complex, stakeholder chains.

Thus, a strictly statistical analysis does not reveal who subcontract to who and how. Empirical surveys that reconstruct the complex chains formed by stakeholders in the parcel delivery sector such as [START_REF] Moore | Paying for Free Delivery: Dependent Self-Employment as a Measure of Precarity in Parcel Delivery[END_REF], Rème-Harnay (2018), [START_REF] Ducret | Structuring last-mile parcel delivery solutions for urban zones: an innovative spatial approach for urban goods distribution[END_REF] only portray the issues related to this sub-sector. Our aim in this paper is to analyse the situation of the urban operators and then compare it with those which are classified a priori into a distinct statistical category, inter-urban ones.

To do this, we shall first refer to a survey we conducted in 2015. The main investigative mechanism involved direct meetings with delivery drivers at freight delivery points in the Paris region (Paris + 6 departments around). Our sample consisted of 67 firms working as subcontractors. Of these, 25 were self-employed individuals with no employees, the other 42 were either the employees or owners of subcontracting firms. When these employees were unable to provide any information about their firm's turnover, they gave us their employer's contact details. 18 interviews were therefore conducted between 2015 and 2017 with the owners of the firms whose employees had been briefly interviewed. Some of these were conducted by telephone while five were longer biographical interviews.

In addition to these interviews conducted between March and October 2015 in a few minutes during deliveries, 20 longer interviews were conducted between 2019 and 2021 with employees and managers of parcel delivery companies in order to evaluate the outsourcing rate of their agencies, the difference of treatment between drivers employed by the group and subcontracting drivers. Furthermore, members of transporters' federations and drivers' unions, land transport inspectors and registration services from the Regional and Interdepartmental Directorate for Infrastructure and Planning (DRIEA) where also interviewed to provide a more macroeconomic overview of the parcel delivery sector.

Concerning long-distance transport, we rely on a French professional journal, l'Officiel des transporteurs 6 , existing since 1957 which portrays one or several transport firms each week.

Most of the firms presented in the Officiel are both principals and subcontractors. There is also a bias towards large groups. We went back to 2004 to have a sufficient number of firms without going too far in the past and chose the firms operating only as subcontractors in the longdistance transport, taking care of selecting as many small firms as possible.

Results

Results are articulated around the notion of economic dependence for two different geographical scales, urban (4.1) and interurban (4.2).

The economic dependence of urban carriers

A first sub-section, dedicated to urban transportation, shows how urban constraints weigh on parcel delivery groups (4.1.1), the second one focuses on the consequences for urban carriers in terms of economic dependence (4.1.2).

Outsourcing to face urban constraints for parcel delivery groups

The parcel delivery sector has grown considerably over the last forty years because of the explosion of e-commerce (global e-retail sales amounting to $3.53 trillion in 2019 compared to $2.8 trillion in 2018 [START_REF] Coppola | How is own account transport well adapted to urban environments[END_REF] and the fragmentation of flows. It has been constructed on the basis of networks of agencies throughout the country. These consist of huge warehouses where the reception, sorting and dispatch of a large number of parcels are organised. A network of this type requires very large financial investments; therefore 15 large multinational groups dominate the parcel delivery services market (Geopost, Fedex, UPS etc.).

Behind this growth, however, lies a more heterogeneous reality. For many years, their net profits have been structurally the lowest in the transport sector7 . The long-established parcel delivery groups have also seen their market shares reduced by the arrival of new players such as Amazon Transport. They therefore seek to achieve savings, especially on the most costly parts of their production chain [START_REF] Hermann | The liberalisation of European postal markets and the impact on employment and working conditions[END_REF], i.e. local rounds made by light commercial vehicles (LCVs) with delivery drivers in large cities and their suburbs.

Urban areas impose specific constraints on transport operators. Delivery density, i.e. the number of delivery points in a given area, is higher than average (Figliozzi and Tipagornwong, 2007).

High density "is a burden on the organisation of distribution. It determines the number of distribution rounds, their organisation, the type of vehicle and, ultimately, the level of productivity. A high density of delivery points can result in the need to deliver to a large number of points along a section of road, can force the delivery vehicle to make frequent stops" (Ducret, 2014, p. 159). Delivery density affects the productivity of delivery rounds.

Secondly, congestion, defined by Béziat as "a phenomenon that occurs when an infrastructure can no longer meet the demand placed on it without reducing the quality of service for users" (2017, p 311), is also particularly high in urban areas. The example of the Paris region is particularly striking since it is one of the most congested in Europe: "more than 62% of the kilometres of traffic jams observed in France are in the Paris region and drivers spent an average of 55 hours per year in traffic jams in 2013" (Idem).

Finally, parking in urban areas has become a challenge for LCVs. Béziat has noted a decrease in the number of parking spaces in the Paris region, and attributes this to Paris City Hall's "antiautomobile" policy (2017, p. 279). The number of parking spaces in the Paris region for various types of road users decreased by nearly 15% between 2003 and 2012 [START_REF] Koning | The good impacts of biking for goods: Lessons from Paris city[END_REF]. This reduction is particularly problematic for delivery drivers as the Urban Freignt

Transport Surveys estimate that parking takes up between 20% to 60% of their tours' duration (Béziat, 2017, p. 198).

These severe urban constraints slow down delivery rounds for the large parcel delivery groups.

Outsourcing deliveries allow to extend the tours. Self-employed drivers can thus drive more than 7 hours per day (as provided by the decree which fixes legal driving time at 35 hours per week). According to the 2015 survey described below, subcontracting drivers have delivery rounds that take on average 9 hours a day in the Paris region, which is two hours more than drivers employed by parcel delivery groups.

The use of subcontracting seems to be one of the most effective ways of circumventing this legislation and reducing costs [START_REF] Moore | Paying for Free Delivery: Dependent Self-Employment as a Measure of Precarity in Parcel Delivery[END_REF]. The subcontracting out of local urban delivery rounds has gradually increased at the expense of employee recruitment. Our interviews with the employees of 20 parcel delivery groups dispatch services (within 13 different parcel delivery groups) show that, on average, 90% of delivery drivers are not employed by the group in 2021. Subcontracting is used as an economic adjustment variable, and is the most effective means of introducing flexibility. The same type of organization can be found in the United Kingdom [START_REF] Moore | Paying for Free Delivery: Dependent Self-Employment as a Measure of Precarity in Parcel Delivery[END_REF], Italy [START_REF] Benvegnu | Nelle officine della circolazione : un'etnografia del lavoro logistico tra il Grand Paris e la metropoli diffusa veneta[END_REF] and Spain (Lopez Calle, 2016).

Consequences of subcontracting for urban carriers

While this is advantageous for the large parcel delivery groups, subcontracting also creates insecurity for delivery drivers [START_REF] Strauss | Towards a geography of precarity?[END_REF].

Moore and Newcombe (2018) have showed how massive subcontracting affect the precarity of delivery drivers in the United Kingdom. These scholars in particular highlight the role employers play in organising precarity by effectively creating competition within their firms between workers with the status of insiders and those with that of outsiders who lack social protection. Ultimately, this competition weakens the position of each delivery worker by making it possible to perpetuate precarious working conditions, in particular low wages and long working hours.

Our 2015 survey of 67 delivery drivers also enables to compare working conditions for the delivery drivers employed by the group and subcontracted ones. As we have seen, subcontracting delivery drivers undertake longer daily rounds than employee drivers, and may deliver as many as 150 packages per day.

However, our emphasis is more precisely placed on interfirms relationships, and economic dependence in particular. While legally they are considered to be self-employed workers, who have been recruited instead of employees, they are in fact generally dependent on and captive of their principals.

Most studies on outsourcing evoke economic dependence but they tend to consider it as a single indicator, generally the share of turnover made by subcontractors with their main principals (Violland, 1985, Perraudin and[START_REF] Ducret | Structuring last-mile parcel delivery solutions for urban zones: an innovative spatial approach for urban goods distribution[END_REF].

Another literature more focused on workers rights consider dependent workers (working up to 50% or 75% of their revenue for one single firm) as economically vulnerable and propose to protect them by the construction of a category called "the independent worker economically dependent" [START_REF] Perulli | Study on economically dependent work/ parasubordinate (quasi-subordinate) work, General report for European Parliament Rageau[END_REF]. A recent european study on dependent self-employment covering transport as a specific sector that is affected [START_REF] Eichhorst | Youth Unemployment in Europe: What to Do about It?[END_REF] portrays self-employed workers that are economically dependent on a principal arguing that "those workers who cannot be regarded as employed persons, but are in a situation of economic dependence vis-a -vis a principal, should be able to benefit from the social rights to which this dependence entitles them" (p. 220). These categories of workers exist in Spain and Germany but have not been generalised in Europe.

Our 2015 survey is not focused on the only delivery drivers working alone but stresses on the relations between lead firms and their subcontractors (whether self-employed drivers working alone or very small firms). It shows how subcontracting impacts the economic strategies of urban subcontractors but places emphasis on several indicators of economic dependence to show how much captive they are:

-56 of the 67 businesses reported that they cannot access customers directly; the problem is that subcontractors are not able to respond to the shippers' calls for tenders because they do not have enough trucks at competitive prices. To obtain freight, they are forced to go through the intermediary of the parcel delivery groups.

-51 of these 56 businesses also derive all their turnover from subcontracting;

-the percentage of turnover generated with their main principal is on average 78% for the 67 businesses;

-more than half (34 out of 65) of the subcontractors make 100% of their turnover with a single principal.

We should add to these quantitative findings the fact that the ability of a subcontractor to work for more principals in order to reduce its dependency on a single parcel delivery group is limited. Urban delivery rounds are so dense that it is almost impossible for a single person to work for two firms. In this survey, only 2 of the 67 respondents had tried to do rounds for two principals on the same day. The constraints mean that to perform delivery rounds for several principals, subcontractors would therefore need to recruit drivers and buy additional vehicles, both of which are substantial economic obstacles.

This high level of dependency is not without consequences for urban subcontractors as it increases their vulnerability. Thus, the Paris region is the French region with the highest bankruptcy rate among transport firms. 8,8% of the carriers were cancelled from the transport register (that gathers every transport firm) in the Paris region in 2015 because they went bankrupt or stopped operating. This is three of four times the French average rate (the number of firms that go bankrupt in relation to the total number of firms) according to the Coface Institute (Madajarian, 2016). It is the smallest companies that are the most vulnerable: "73% of failed companies have less than 10 employees" (idem). In addition, this rate is not decreasing with time, since the bankruptcy rate of transport companies (5.2%) was still very high in 2019

according to the AUTF (2019), a French shippers association.

Furthermore, the amount of undeclared workheads of companies recruit drivers without paying legal employer costs and registering them for social insuranceis constantly on the increase. In 2016, nearly a quarter of the 600 transport undertakings engaged in undeclared work8 , and it is local transport that is most affected by this type of fraud (Acoss, 2016).

Overall, subcontracting results in devolving responsibilities from large multinational groups to very small urban firms. Whereas employed drivers has no obligation of results and are payed on hourly basis, subcontracted drivers are payed a certain amount for each parcel delivered and their pay is reduced by a series of penalties in the event of late or defective deliveries. The same is true for vehicles' responsibility, devolved to small firms. As shown by a 2011 survey in the Paris region (Gonzalez-Feliu, Ambrosini, Routhier, 2012), out of the 33 parcel delivery hubs 9

(belonging to large companies) identified in the sample only seven had their own vehicles (an average of 5). Twenty of the 33 hubs hired vehicles (an average of seven per hub), 31 used subcontracting on a massive scale, averaging 93 vehicles per hub. It is therefore overwhelmingly the very small subcontracting transport undertakings that bear the responsibility for the purchase or rental of transport vehicles. The 2015 survey reveals that on average the vehicles subcontractors use are 8 years old. The majority of small light transport companies cannot afford electriv LCV since the median turnover of such companies in the 2015 survey sample was €77,000, meaning the purchase of an electric vehicle would represent at least one third of their turnover. Renting electric LCV could be a pertinent solution in the short term, but ultimately, the renting price for one year is similar as the purchase one (including the deductible the event of an accident).

Therefore, the switch from diesel-powered to electric vehicles is seriously jeopardised by this system, which relies on vulnerable operators who lack the required resources.

Urban outsourcing seems to create numerous problems for which local levers of action could be pertinent, especially if inter-urban transport relies on an organisation completely different creating a much lesser dependence.

Free from the constraints of urban areas: a different kind of subcontracting for interurban carriers?

In France, INSEE maintains up-to-date statistics on inter-urban transport, which it treats as a category of transport in its own right. It includes refrigerated transport, sawn timber, livestock, heavy or oversized products, which may be in containers or in bulk, tanker trucks, as well as cars and waste. The latest INSEE ESANE 10 surveys show a sector dominated by very small companies with less than 9 employees (table 2). These make up 76% of the sector, while companies with more than 50 employees account for only 5%. This segmentation is no different from that of the other sub-segments of the road freight transport and is likely to favour subcontracting by large firms to smaller ones. What we wish to determine here is whether subcontractors in this category can choose their own business strategies or whether, as in the case of urban parcel delivery services, they must comply with those of their principals, and are therefore captive because of their economic dependency. Does removing the constraints associated with the city, namely congestion and parking difficulties, and reducing delivery density mean that subcontracting has fewer adverse socio-economic consequences? Can subcontractors avoid economic dependency on a single principal more easily? These are the questions this section sets out to answer.

A specific feature of inter-urban transport: spot subcontracting

While subcontracting for urban parcel delivery services is a way of reducing costs and circumventing the 35-hour legal weekly working time limit for parcel delivery drivers, its role may be completely different in inter-urban transport.

Inter-urban transport mainly relies on two types of organisation: full truck loads, which involves moving a truck with a load intended for a single customer, and part load transport for which the truck's load consists of different consignments for different customers. Carriers can sign regular contracts for both these types of organisation, and these enable them to organise their routes in advance. However, it is much rarer for contracts of this type to include return loads to the initial destination. To avoid the resulting empty runs and/or to optimise the filling of their trucks, carriers must therefore look elsewhere than their regular customer base for return loads. This can be done via transport networks or groupings (such as Astre, Flo, Evolutrans...). In interurban transport, groupings are of interest to transport SMEs in several ways. When they take the form of cooperatives, they make it possible to conduct joint purchasing in order to obtain advantageous prices for fuel and vehicles, to respond to calls for tenders issued by major players (such as the mass retail sector), to negociate prices and to have a network of peers to access return freight offers, in return for a commission. This can also be done via freight exchanges that connect freight forwarders offering freight to be transported at certain prices to carriers, or nowadays through digital platforms that set up links between carriers and shippers. When a carrier responds to an offer from another carrier or a freight forwarder on a freight exchange or as part of a grouping of carriers, it will have the status of a subcontractor. In these circumstances, subcontracting does not correspond to a desire to replace an employee with a subcontractor in order to reduce costs. Rather, it is part of what is often a weekly organisational framework that usually involves irregular and short-term relationships (spots) with the principal via freight exchanges, and sometimes with peers via networks. This subcontracting does not necessarily imply a more equitable balance of power since it is generally the principals who set the prices themselves. Thus, according to a survey conducted by the FNTR (National Federation of Road Hauliers) among 970 of its members in 2012, in 98% of cases the prices are set by those who place the advertisement. For almost three-quarters of the companies in the sample, the prices do not even cover their overheads. Moreover, each of the carriers had already refused a request for transport on the grounds of price. However, the level of economic dependency on the principal is likely to be lower for several reasons. First, the principals are much more diversified, particularly in the case of spots. What is involved is not doing an entire round for another firm but a single one-off trip. Secondly, because the subcontractor may have specific assets that mark it out from the others.

In the urban parcel delivery sector, apart from owning a "clean" LCV and being willing to accept staggered schedules, it is difficult to mark oneself out from the other subcontractors doing rounds. In inter-urban transport, given the range of special vehicles, specific know-how, and the types of products transported, the subcontractor is less easy to replace and may well be able to develop a relationship of mutual dependency with its principal.

Regular subcontracting in inter-urban transport: Findings from empirical surveys

Surveys on inter-urban subcontracting are conducted more rarely than surveys on urban subcontracting 11 . Two recent sources nevertheless shed some light on the scale of economic dependency among inter-urban transport subcontractors.

The first is a small database based on articles in the Officiel des transporteurs. This trade magazine regularly elicits statements from various carriers on their activities. For those interviewed carriers who work as subcontractors, it states what percentage of their activities subcontracting represents, and sometimes the reasons why they work in this way. We have selected 35 carriers who have worked as subcontractors during the last 15 years. Table 3 sets out the reasons they became subcontractors, these still include gaining access to freight and the need to use an intermediary. Thus, for some carriers, such as those providing long haul between agencies and those performing rental operations, it is almost natural to work as subcontractors 11 Apart from a survey carried out in 1981 in the Lyon region [START_REF] Violland | Deregulation of road freight transport. The french experiment [La dérèglementation des transports routiers de marchandises. L'expérience française[END_REF].

for the parcel delivery groups. They also work as subcontractors when carrying refrigerated freight for major retail groups and freight from shipping lines. (2004)(2005)(2006)(2007)(2008)(2009)(2010)(2011)(2012)(2013)(2014)(2015)(2016)(2017)(2018)(2019) In addition, this database contains the percentage of carriers' activities that are conducted as subcontractors: 47% on average (with a median of 40%) of the activities of 35 carriers in question are produced as subcontractors. The rest is realised working directly for shippers, which is considerably less than for subcontractors working in parcel delivery services, more than 90% of whom generate 100% of their turnover from subcontracting.

Moreover, the activities of inter-urban carriers are always quite diversified. Only one company claims to have worked with a single principal. This contrasts with the local transport sector where more than half of the subcontractors generate 100% of their turnover from a single principal.

In this context, it is essential to consider the size of the companies in this database, which exceeds that of the 2015 survey and reduces the validity of the comparison. The sample from the Officiel des transporteurs is biased in favour of large businesses (only 7 firms had under 9 employees, 15 had between 10 and 49, and 11 had over 5012 ). Despite this bias, the 15% legal limit of principals' turnover (achieving by subcontracting) and the greater possible diversity of principals create what appears to be lower dependency, meaning the subcontracting firm appears to be better able to pursue its own strategies.

Another survey conducted in 2016 focuses on the use of subcontracting to enable them to operate more smoothly in order to benefit from membership of a network [START_REF] Niérat | The production conditions in road freight transport [Les conditions d'exploitation dans le transport de marchandises[END_REF]. It describes subcontracting that is not only carried out with a view to saving money but also to streamline the company's overall organisation. One of the main difficulties that confront interurban carriers is time management. They cannot plan their schedule very far in advance. They have to be able to change it the day before or even the same day. Niérat's research focused on the position of an inter-urban carrier, which he considered to be a typical case [START_REF] Niérat | The production conditions in road freight transport [Les conditions d'exploitation dans le transport de marchandises[END_REF]. This company operated in the long-distance sector from central France, for regular customers.

But it did not have a regular contract for return runs to central France. The company therefore spent time trying to find return freight "either through peers, members of the same grouping, or through freight exchanges" (idem). It then operated as a subcontractor on these routes. The operators of this company estimated the time they would be unloaded, monitored the movement of their GPS-equipped trucks and updated their estimates. However, they could receive requests from customers that are incompatible with the schedule. "They then have to find another carrier to perform this task. In this case, the company looks for a subcontractor" (idem). On other occasions, the customer had incorrectly estimated the time their goods would be ready for pickup so they could not be carried, in conflict with the schedule. Here again, the company must adapt by finding freight which it could carry as a subcontractor.

These studies show the difference in the nature of each sector's subcontracting operations. For long-distance haulage, subcontracting is part of general organisation of the companies. It serves not as a means of reducing payroll costs but to fill empty space, avoid idle time, retain their regular customers, nurture a network of peers, etc. With this form of subcontracting, the principals do not make significant profits but rather ensure they can provide an efficient, regular, haulage service. Neither party depends on subcontracting for its survival.

Discussion: Questioning the scale or regulation

These portrays of urban /inter-urban outsourcing show contrasted situations, summarised in table 4, that suggest for public decision makers to propose distinct regulation mode, in particular a protection for urban subcontractors. Should subcontracting be regulated by the governments of cities where they deliver? Some variables that are barely detectable in the statistics may bring the scale of decision making (urban/national) into question.

5.1.The role of the type of vehicle

A first variable is linked to being captive in an area as a result of the type of vehicle used.

We think of urban delivery drivers as in principle using only LCVs in order to better cope with urban roads and park more easily. The 2015 survey also shows that such LCVs have sometimes even been replaced by smaller so-called leisure activity vehicles such as the Kangoo or

Berlingo. It should be mentioned that having only LCVs allow the company to minimise the cost of registration as a transport firm, which is five times less than for a heavy goods vehicle (Table 5). Moreover, light vehicles do not need any tachograph. Thus, delivery drivers that use them do not have to observe European break and rest period rules. Therefore, legislating on light vehicles can be considered as a way to regulate urban freight transport. It creates barriers to entry for transport firms. Each individual who wants to start a business must fulfill some specific conditions made mode stringent in 2011 as can be seen on the table 5.

However, vehicles' use shows a more complex reality. A recent survey (Rageau, 2019) has shown that only one driver in five uses an LCV. Moreover, contrary to our initial assumption, the drivers of short-distance heavy goods vehicles outnumber those driving other vehicles (idem). Unfortunately, this survey does not specify the type of heavy goods vehicle. Thus, owning a road tractor allows drivers to handle every kind of semi-trailers assigned to them, providing them with a more diverse customer base. However, owning a refrigerated truck, a tanker or a tipper truck is more restrictive from the point of view of diversification but makes it possible to occupy a niche that creates mutual dependency with the principal. LCVs are, however, neither dedicated to a given type of transport nor conducive to much diversification. Here, it is not the distinction between urban and inter-urban transports that determines the level for decision making but the differences between the vehicles (outlined by the thick line of table 6). According to this discussion, carriers should prefer heavy vehicles to reduce their economic dependence.

The specificity of parcel delivery services

Secondly, while, in general, the difference between short distance and long-distance transport has a considerable impact on the nature of subcontracting, this does not necessarily apply within the parcel delivery sector. Indeed, parcel delivery services do not consist only of local delivery rounds but also include inter-urban freight transport. Thus, heavy goods vehicles carry large quantities of goods between two agencies. However, when trucks are used, the work is generally outsourced to long haul contractors. These sometimes work at night and face similar constraints to the urban subcontractors: self-employed workers are in this case too recruited instead of employees, and the deadlines to be met are as tight as those for delivery drivers doing a round.

Their schedules are timed and these long-distance hauliers, like the drivers who do urban delivery or pick-up rounds, are just one small link in a chain of players who are more economically powerful. However, their dependency can be reduced if they own a road tractor that allows them some degree of diversification. Making decisions only at the urban scale may not be sufficient. The entire organisation of the parcel delivery sector rests on dependence chain that put a strain on each level. Shippers as parcel delivery groups must be questioned on their social and environment implications. Public decisions rely on the sub-sector concerned. More precisely, parcel delivery services (whether urban or not) is opposed to other sectors (distinction represented by the thick line on table 7). Therefore, to start a business, it must be more pertinent in order to reduce economic dependence, to choose another sub-sector than parcel delivery services.

5.3.Hyper-dense urban areas versus peri-urban areas

Another distinction must be made between dense urban and peri-urban areas. In the Paris region, for example, the way the parcel delivery groups allocate freight between their employees and subcontractors does not correspond to the urban/inter-urban split. Indeed, the parcel delivery groups keep the best rounds for their employees. The best rounds are those in dense areas, where there are a large number of packages to be delivered over a short distance, which does not require the driver to travel too far to complete the round within the 7-hour daily time slot while at the same time making the 7 hours of work as productive as possible. Our interviews show that the rounds which are near the parcel delivery group's agencies are done by employees while rounds in peri-urban areas are more likely to be subcontracted, as the manager of an agency says : "the rounds are allocated in a way that reduces the volume [given to subcontractors],[on routes] that are not very productive in terms of pick-up and which involve long distances" (interview, 2019). Moreover, an examination of the data from the Annual Declaration of Social Data13 in 2010 and 2015 shows an increase in the number of delivery workers within Paris with permanent work contracts, while this proportion is stable or declining for the other departments in the Paris region. There are therefore differences within urban parcel delivery services that should not be overlooked. Firms' strategies partly determine the outsourcing consequences on urban spaces. This interrogates the idea of a city regulation.

Decisions should be taken in relation with those firms' strategies according to the distinction made in table 8. Finally, apart from the distinctions between urban and inter-urban transport, parcel delivery services and other delivery services, hyper-dense and medium-dense areas, the economic dependency involved in subcontracting is affected by a number of variables: the availability of a network of peers, the specific nature of the service offered by the subcontractor, the way the companies and principals organise their transport and the opportunities have in terms of customers. The importance of the size of the subcontractor must also be stressed [START_REF] Rème-Harnay | Trajectories of economically dependent self-employed drivers [Parcours de sous-traitants économiquement dépendants : l'exemple de la messagerie urbaine[END_REF]. All the more so as by recruiting new delivery drivers, SMEs also reach a critical size that allows them to withstand fluctuations, and to be less vulnerable to the bargaining power of their principal. Thus, the subcontractors who reported being able to negotiate prices in the 2015 survey conducted all had more than five employees. Therefore, national governments should support transport firms at their first stages by fostering them to recruit.

The different factors likely to impact economic dependence and firm captivity are summarised in table 9. It should be noted that the divide between urban transport and inter-urban transport is not so relevant as expected when presenting the regulation in part 1. The type of vehicle, the sub-sector chosen, the lead firms' spatial strategies can all be aspects that affect subcontractors.

5.4.The complexity of regulation according to the different consequences of subcontracting

This is however based on this divide that several measures have been taken to regulate subcontracting. If we consider the 15% ceiling for outsourcing, the separated driving time for parcel delivery drivers and long-distance ones or the barriers to entry lighter for LCVS, it seems clear that French governments are particularly tolerant towards the existence of a large pool of urban subcontractors, unlike the social, economic and environmental consequences they have to face. On the contrary, inter-urban subcontracting is regulated by a stronger legislation. This can question the aim of this kind of legislation: encouraging subcontracting in parcel delivery services to maintain its efficiency? Protecting French inter-urban sector from European competition, especially Cabotage-transport?

Concerning vehicles, since 2020, the level of decision-making is hybrid. On the on hand, French government proposes a national prime up to 7000 euros for the purchasing of new electric vehicle or hybrid vehicle emitting less than 50 g/km for two years. On the other hand, the Paris region proposes an additional prime up to 6000 euros for the firms of less than 50 employees for commercial electric vehicles of less than 3,5 tons. This precise measure considers the urban nature of the activity and the size of the firm. Concerning the environmental aspects, public regulation seems to have found a way to take into account the specificities of urban logistics while maintaining a national framework for other firms.

Finally, this is on the social side that regulation is the weakest, and never proposed at a local level. For years, a specific fiscal advantage (called ACRE (support for business start-up)14 ) prevailed to assist new firms during their first four years by reducing their employer's costs.

Unfortunately, in 2020, it has been reduced to one single year. Moreover, the framework contract that regulates relationships between principals and subcontractors has been revised in 2019 but with new terms to the disadvantage of subcontractors. Finally, a proposition of law was initiated in 2016 to protect small firms from the abuse of economic dependence but it did not lead to a law. Concerning the social consequences of subcontracting, all regulatory attempts are national and weakly protective.

Conclusion

Taking the case of France as an example, this article shows that freight transport has been affected by the typical trends that have affected capitalism since the late 1980s with the growth of outsourcing, and an increasing demand for flexibility. Within the urban freight segment, these developments have led to the gradual replacement of employees by subcontractors and have had a number of adverse consequences, especially at the level of working conditions. But this subcontracting to reduce costs is combined with another type, which is peculiar to the sphere of long-distance transport, and which reflects the way transport firms organise their journeys spatially and temporally.

In principle there is a contrast between the two types of subcontracting, one urban and the other specific to inter-urban transport. This suggests to restrict decisions on transport regulation to urban scale. However, this article shows that this distinction is often questionable. Indeed, there are many variables which, when combined, lead to an increase in a subcontractor's economic dependence on its principal. Only an analysis that takes account of the complex interplay between urban and inter-urban variables can capture the determinants of business-to-business relationships and the levers of action.

Thus, for private agents, as transport firms, operating in urban parcel delivery services can generate a high risk of economic dependence on their principals and a high risk of bankruptcy.

Several strategies can help to escape this captivity: diversify their principals in order to limit their dependence to the main one. To do so, they must quickly recruit drivers and buy several trucks. The firm shall thus, since the beginning, be able to access to a capital, or accept to reinvest immediately a huge part of its revenue to grow, or to develop a network of peers.

Having a heavy truck can also allow this diversification. Finally, they can try to contract with small principals or inter-urban transport firms, which will reduce their captivity.

On the other and, public regulation must consider the chain of actors specific to the parcel delivery sector. The forwarder role has been misguided since their low margins incite them to replace employees by self-employed drivers. But the performance of the system can suffer from higher costs. Therefore, shippers could be included in the responsibility of deliveries and vehicles purchase. The specific subsidies of light commercial electric vehicles in urban areas is well adapted to the urban organization but the social impact of outsourcing in the parcel delivery services need more willingness from national governments. These jobs easily available could be considered as a mean to deal with the high rate of unemployment in France (between 8% and 10% since 2015 15 ). The high performance of the parcel delivery groups however hides a precarization of drivers. The drivers' length of service is so short (Rème-Harnay, 2018) that permanent contracts are in fact reduced to three years maximum, questioning the social insurance model that French is supposed to implement.

15 https://fr.statista.com/statistiques/686154/taux-chomage-trimestriel-france/

Table 9 :

 9 Variables affecting the dependency of delivery drivers Greater risk of high economic dependency Lower risk of high economic dependency  Conducting urban deliveries (+++)  Doing rounds for courier firms (+++)  Working alone with no employees (++)  Not having a network of peers (++)  Only having a light vehicle (+)  Working on the outskirts of the city centre (+)  Making inter-urban deliveries (++)  Not working only for courier firms (+++)  Having employees (++)  Having a network of peers (++)  Having heavy vehicles (+)  Working in the city centre (+)

Table 1 :

 1 Turnover and share of subcontracting for transport and transport organisation activities in 2007.It should be noted here that 15 national parcel delivery groups are operating in France. They deliver small parcels (around 100kg for BtoB and rather 10kg for BtoC according to the quarterly parcel delivery survey from French transport department 4 ) within short deadlines (from 12 to 72 hours). To deliver cities, they subcontract to firms classified as local (urban)

		Local	Inter-urban	Parcel delivery	Chartering and organisation
		(Urban)	transport	services	of transport
		Transport
	No. of firms	20037	12094	1027	2264
	Mean turnover	565	1952	11068	8500
	(thousands of Euros)
	Subcontracting as a	11 %	17 %	52 %	65 %
	percentage of turnover
	Source: EAE (French Annual Business Survey), Calculation by the authors
	1 https://www.legifrance.gouv.fr/conv_coll/id/KALICONT000005635624
	2 https://www.legifrance.gouv.fr/codes/article_lc/LEGIARTI000038720628/
	3 1999-752 and 2016-1550 decrees

Table 2 :

 2 Firms according to their number of employees in 2015

	Activity	Size	31/12/2015
		0 to 9 employees	10,655
	Inter-urban road transport	0 employees	5,957
		1 to 9 employees	4,698

9 Out of about 200 at the time; 10 https://www.insee.fr/fr/statistiques/4654487

Table 3 :

 3 Reasons for working as a subcontractor for inter-urban transport

	Reasons for subcontracting

Table 4 :

 4 Differences between urban and interurban subcontracting

	Urban	Inter-urban
	Subcontracting to reduce costs: externalisation of	Subcontracting to use capacity: increasing production
	costs and circumventing working time legislation	capacities
	 Very high risk of dependency	 Lower risk of dependency

Table 5 :

 5 Conditions for registration in the carriers register according to the road transport package of 2011

		Road freight transport (vehicles	Light transport (≤3,5 t, including 2-
		maximum weight >3,5 t)	wheelers)
	Reputation	No conviction for regulatory offences (driving, employment, and safety record).
	Financial	Required amounts:	Required amounts:
	reserves	9 000 € for the first vehicle	1800 € for the first vehicle
		5 000 € for each remaining vehicle	900 € for each remaining vehicle
	Professional	Through a written exam	Through training and specific exams
	requirements	Through a certification process available
		to a limited number of applicants
	New	Establishment in France
	requirement
		Source : DGITM

Table 6 .

 6 Difference between urban and inter-urban subcontracting and types of vehicles

	Urban		Inter-urban
	Light vehicle	Heavy vehicle	Heavy vehicle
	High captivity	Lower captivity	Lower captivity
	 Very high risk	 Lower risk of	 Lower risk of dependency
	of dependency	dependency

Table 7 .

 7 Difference between urban and inter-urban subcontracting within the courier services sector

	Urban		Inter-urban
	Parcel delivery services	Parcel delivery services	Other than parcel delivery services
	 Very high risk	 High risk of	 Lower risk of dependency
	of dependency	dependency

Table 8 :

 8 Difference between urban and inter-urban subcontracting according to delivery density

	Hyper-dense urban areas	Dense peri-urban areas

https://www.statistiques.developpement-durable.gouv.fr/publicationweb/396

https://www.insee.fr/en/metadonnees/nafr2/sousClasse/52.29A?champRecherche=false

https://www.actu-transport-logistique.fr/bibliotheque-numerique/officiel-des-transporteurs-archives/

See, for France: Insee, ESANE 2013 and 2015, line 5229A https://www.data.gouv.fr/fr/datasets/statistiquesannuelles-d-entreprises-esane/

This represents twice the number of cases detected in 2015, which was itself higher than in 2014. It is difficult to say whether the rise is due to an increase in fraud or more effective enforcement. In any case, this sector has the 5th highest level of fraudulent behaviour in terms of undeclared work(ACOSS, 2016).

Some firms did not give their number of employees.

https://www.insee.fr/en/metadonnees/source/serie/s1163

https://www.service-public.fr/particuliers/vosdroits/F11677

Acknowledgement: The authors would like to thank Kevin Riley for rereading their manuscript.