The role of individual compensation and acceptance decisions in crowdsourced delivery

TL;DR

This paper models and optimizes crowdsourced delivery by explicitly considering how compensation influences driver acceptance, proposing a mixed-integer nonlinear model and an efficient solution algorithm to minimize expected costs.

Contribution

It introduces a novel model that incorporates acceptance probabilities dependent on compensation and provides an exact solution method with polynomial runtime under certain conditions.

Findings

The proposed model outperforms existing approaches in computational experiments.

The solution algorithm is efficient and scalable for large problem instances.

The approach remains effective in dynamic, real-time delivery scenarios.

Abstract

One of the recent innovations in urban distribution is crowdsourced delivery, where deliveries are made by occasional drivers who wish to utilize their surplus resources (unused transport capacity) by making deliveries in exchange for some compensation. The potential benefits of crowdsourced delivery include reduced delivery costs and increased flexibility (by scaling delivery capacity up and down as needed). The use of occasional drivers poses new challenges because (unlike traditional couriers) neither their availability nor their behavior in accepting delivery offers is certain. The relationship between the compensation offered to occasional drivers and the probability that they will accept a task has been largely neglected in the scientific literature. Therefore, we consider a setting in which compensation-dependent acceptance probabilities are explicitly considered in the process of assigning delivery tasks to occasional drivers. We propose a mixed-integer nonlinear model that minimizes the expected delivery costs while identifying optimal assignments of tasks to a mix of professional and occasional drivers and their compensation. We propose an exact two-stage solution algorithm that allows to decompose compensation and assignment decisions for generic acceptance probability functions and show that the runtime of this algorithm is polynomial under mild conditions. Finally, we also study a more general case of the considered problem setting, show that it is NP-hard and propose an approximate linearization scheme of our mixed-integer nonlinear model. The results of our computational study show clear advantages of our new approach over existing ones. They also indicate that these advantages remain in dynamic settings when tasks and drivers are revealed over time and in which case our method constitutes a fast, yet powerful heuristic.