The Impact of Financial Incentives in Last-Mile Operations: An Empirical Investigation | Episode No.37

Workshop’s Topic: Delivery speed is crucial for service quality in last-mile delivery. To address the frequently-occurred order delays due to driver shortage in crowdsourced delivery platforms, platforms often employ financial incentives to dynamically reallocate drivers. However, empirical research on the effectiveness of financial incentives and their spillover-effects in last-mile operations is lacking. This study examines the causal impact of financial incentives on order acceptance speed, using large transactional datasets obtained from a leading crowdsourced platform in China. Our study provides essential insights for crowdsourced delivery platforms, particularly in the strategic deployment of financial incentives. To enhance order acceptance speed, its critical for platforms to extend incentives beyond focal stores and capitalize on surrounding ones to promote a clustering effect, while being mindful of the potential siphon effect. In addition, platforms should consider the dynamics between nearby stores, particularly store type consistency and distance, when formulating incentive allocation strategies to boost operational efficiency and cost-effectiveness.

Time and Location: 13:30-15:00 PM (GMT+8), Room A523 (School of Management)

Language: Bilingual (Chinese and English)