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Outsourcing service price for crowd-shipping based on on-demand mobility services

Author

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  • Peng, Shouguo
  • Park, Woo-Yong
  • Eltoukhy, Abdelrahman E.E.
  • Xu, Min

Abstract

Online-to-offline (O2O) parcel delivery service providers (PSPs) are facing ever-increasing pressure to provide timely and reliable delivery services. An emerging form of collaborative crowd-shipping based on on-demand mobility (COM) services, which utilizes the excess capacity of on-demand mobility vehicles (e.g., taxis and ride-hailing vehicles) to deliver O2O parcels, is proposed to alleviate PSP’s delivery pressure while improving the profitability for the on-demand mobility service provider (OMP). This study investigates an outsourcing service price problem for a collaborative COM considering the game play between PSP and OMP. A bilevel optimization model is formulated, and a customized iterative hybrid (IH) algorithm integrating two tabu search algorithms with objective-oriented granularity and a genetic algorithm is proposed to find the solution. Numerical experiments conducted on randomly generated instances and a real-life case study demonstrate that the COM model with a well-designed outsourcing service price can benefit both participants, with PSP achieving up to 17.0 % cost savings and OMP achieving up to 15.8% profit improvement.

Suggested Citation

  • Peng, Shouguo & Park, Woo-Yong & Eltoukhy, Abdelrahman E.E. & Xu, Min, 2024. "Outsourcing service price for crowd-shipping based on on-demand mobility services," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 183(C).
    • Handle: RePEc:eee:transe:v:183:y:2024:i:c:s1366554524000413
    DOI: 10.1016/j.tre.2024.103451
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