Designing pricing and compensation schemes by integrating matching and routing models for crowd-shipping systems

Tho V. Le, Satish V. Ukkusuri, Jiawei Xue and Tom Van Woensel

Transportation Research Part E: Logistics and Transportation Review, 2021, vol. 149, issue C

Abstract: This paper’s objective is to identify pricing and compensation schemes under different demand and supply scenarios for crowd-shipping (CS) systems. As such, an integrated framework of matching and routing models have been developed. A routing strategy is established to estimate for distances that couriers need to travel for picking up and delivering packages. A matching model is developed to assign crowd-shipping customers (i.e. senders) to couriers and to maximize the CS platform providers’ benefits. Four different schemes of pricing and compensation are developed and evaluated. CS firms are noticed to have the highest profits when apply the ‘individual’ pricing and compensation schemes. The platform provider’s profits are found more sensitive with the increase of willingness to pay (WTP) than the rise of expected to-be-paid (ETP). The insights are helpful for CS firms to attract and retain customers and couriers in the system, by setting up optimal prices and optimal compensations based on demand and supply levels as well as the firms’ expected profits and platform-users’ presuming surplus.

Keywords: Crowd-shipping; Pricing scheme; Compensation scheme; Matching; Routing; Demand and supply. (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (13)

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DOI: 10.1016/j.tre.2020.102209

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