Piggyback on Idle Ride-Sourcing Drivers for Integrated On-Demand and Flexible Intracity Parcel Delivery Services

This paper investigates spatial pricing and fleet management strategies for an integrated platform that provides both ride-sourcing and intracity parcel delivery services, leveraging the idle time of ride-sourcing drivers across a transportation network. Specifically, the integrated platform simultaneously offers on-demand ride-sourcing services for passengers and multiple modes of parcel delivery services for customers, including (1) on-demand delivery, where drivers immediately pick up and deliver parcels upon receiving a delivery request; and (2) flexible delivery, where drivers pick up (or drop off) parcels only when they are idle and waiting for the next ride-sourcing order. A semi-Markov process (SMP) model is proposed to characterize the status change of drivers under joint movement of passengers and parcels over the transportation network with limited vehicle capacity, where the service quality of ride-sourcing services, on-demand delivery services, and flexible delivery services are quantified. Building on the SMP model, incentives for ride-sourcing passengers, delivery customers, drivers, and the platform are captured through an economic equilibrium model. Subsequently, we derive the platform’s optimal spatial pricing by solving a nonconvex profit-maximization problem. We establish the well-posedness of the model and introduce a customized algorithm that enhances computation time and numerical stability when determining the platform’s optimal strategies, outperforming the benchmark method. We also validate the proposed model and algorithm through a comprehensive case study of San Francisco. Numerical results indicate that ride-sourcing and parcel delivery services exert both complementary and competitive effects on each other, with the integrated business model’s overall impact hinging on the complex interaction between ride-sourcing orders, on-demand parcel delivery orders, and flexible parcel delivery orders.

Funding: This work was supported by the Research Grants Council of Hong Kong [Grants 16202922 and 26200420].

Supplemental Material: The online appendix is available at https://doi.org/10.1287/trsc.2024.0601.