Dynamic Confirmation, Compensation and Routing for Combined Urban Transportation of Passengers and Parcels

Yilun Wang () and Min Xu ()
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Yilun Wang: Department of Industrial and Systems Engineering, The Hong Kong Polytechnic University, Hong Kong
Min Xu: Department of Industrial and Systems Engineering, The Hong Kong Polytechnic University, Hong Kong

Transportation Science, 2025, vol. 59, issue 5, 932-950

Abstract: Passengers and parcels have long been served by separate vehicle fleets in urban areas. This study investigates the integration of parcel delivery and passenger ride services by a single fleet of mobility-on-demand companies. While this integration holds significant promise for enhancing profitability, it poses a challenge for operational sustainability: the detours required for parcel deliveries could adversely affect the passenger experience. We explore the viability of offering compensations as incentives for detours in a dynamic and stochastic environment. In this scenario, service requests are received dynamically, and the passengers’ acceptance of detours remains uncertain. We propose an innovative anticipatory policy, which integrates confirmation, compensation, and routing decisions. The proposed policy is underpinned by a novel regression-tree-based value function approximation. The numerical experiments have validated the efficacy of proposed policy. Moreover, we also explore the advantage of this combined transportation, which could effectively enhance profitability with few marginal costs. The study serves as a valuable reference for mobility-on-demand companies regarding the combined transportation of passengers and parcels.

Keywords: integrated passenger-parcel transportation; dynamic compensation; dynamic stochastic vehicle routing; value function approximation (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ortrsc:v:59:y:2025:i:5:p:932-950

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