How e-commerce influences last-mile practices that foster informality

E-commerce has significantly altered urban logistics, driving an unprecedented surge in last-mile deliveries while amplifying labor, regulatory, and environmental challenges. In many cities, particularly in developing economies, these challenges are compounded by institutional weaknesses and the widespread emergence of informality in logistics operations. This study examines how informality has evolved into a defining characteristic of last-mile e-commerce, shaping precarious labor conditions, increasing road safety risks, and exposing regulatory gaps. Employing an inductive qualitative approach, this research follows an explanatory and instrumental case study design based on semi-structured interviews with five key stakeholder groups: delivery drivers, e-commerce companies, public sector representatives, logistics and road safety experts, and society representatives. Findings indicate that outsourcing last-mile logistics has allowed companies to minimize costs while transferring operational risks to informal workers, reinforcing a system where economic efficiency takes precedence over labor protections and sustainability. Additionally, the lack of regulatory oversight has led to the institutionalization of informality, perpetuating a cycle in which negative externalities—such as congestion, road crashes, and environmental degradation—are borne by society rather than private actors. These findings underscore the need to reassess governance strategies in last-mile logistics, ensuring operational flexibility does not come at the expense of social and economic sustainability, and informing more inclusive and adaptive transport policy responses.