Crowd-shipping as a Service: Game-based operating strategy design and analysis

Abstract

Crowd-shipping as a Service (CSaaS), a novel concept proposed in this study for the Online-to-Offline (O2O) market, integrates different kinds of shipping services provided by individuals and public transport (PT) operators and enables booking and payment through a single CSaaS platform. It largely increases the shipping capacities and provides a flexible shipping mode for consignees with parcel delivery requests. Focusing on the role of the CSaaS platform, we design the commission-based and integrator-based operating strategies in the presence of CSaaS, where the CSaaS platform acts as an intermediary and a reseller, respectively. To explicitly depict the interactive relations among O2O players, i.e., the CSaaS platform, the individual-based crowd-shipping (I-CS) platform, the PT operator, the conventional logistics (CL) platform, and consignees, we adopt a game-theoretic approach to formulate the business models with and without CSaaS and derive the optimal behaviors of these players, i.e., the price decisions of platforms/operators and the choice decisions of consignees regarding which shipping mode (i.e., the I-CS, CSaaS, and CL modes) to choose. Analytical results show that the commission-based operating strategy outperforms the integrator-based strategy with a larger CSaaS platform's profit. In addition, the impact of CSaaS on O2O players is also identified by comparing the results of two business models, which is found to be closely related to the urban structure regarding PT accessibility. Managerial implications concerning launching the CSaaS service are proposed at last.