Putting a Price on Immobility: Food Deliveries and Pricing Approaches

TL;DR

This paper quantifies consumer valuation of food delivery services in Beijing, revealing significant underpricing and proposing a new quantity-based pricing model to address externalities like congestion and emissions.

Contribution

It introduces a novel valuation approach for delivery access and proposes a practical, equity-conscious pricing model targeting delivery speed to mitigate externalities.

Findings

Consumers value delivery access at about USD80.

Valuations for faster, more reliable delivery exceed typical fees.

Proposed pricing model focuses on delivery speed rather than volume.

Abstract

Urban food delivery services have become an integral part of daily life, yet their mobility and environmental externalities remain poorly addressed by planners. Most studies neglect whether consumers pay enough to internalize the broader social costs of these services. This study quantifies the value of access to and use of food delivery services in Beijing, China, through two discrete choice experiments. The first measures willingness to accept compensation for giving up access, with a median value of CNY588 (approximately USD80). The second captures willingness to pay for reduced waiting time and improved reliability, showing valuations far exceeding typical delivery fees (e.g., CNY96.6/hour and CNY4.83/min at work). These results suggest a substantial consumer surplus and a clear underpricing problem. These findings highlight the need for urban planning to integrate digital service economies into pricing and mobility frameworks. We propose a quantity-based pricing model that targets delivery speed rather than order volume, addressing the primary source of externalities while maintaining net welfare gains. This approach offers a pragmatic, equity-conscious strategy to curb delivery-related congestion, emissions, and safety risks, especially in dense urban cores.