Optimal Delivery Time And Commission For Food Delivery Platforms Considering Social Welfare

The rise of the gig economy provides a new mode of employment for the society.Gig platforms connect freelancers with consumers to provide short-term services or asset sharing.The growth of the gig economy,however,has been accompanied by controversy.Recently,food delivery platforms recruit a large number of gigs as delivery drivers and set strict delivery time and commission for them based on big data technology.This not only seriously threatens the delivery drivers’ life safety,but also causes a huge cost to the society leading to a strong negative externality on traffic.The rights and interests of delivery drivers was placed in the forefront of public opinion.This paper set a Stackelberg game model to reveal how to set the optimal delivery time and commission to maximize the platform profit.At the meanwhile,considing the negative externalities caused by short delivery time,this paper explores the strategy on how to maximize social total welfare.Finally,the consumer surplus,delivery driver surplus,platform profit and total social welfare under different targets are compared and analyzed,so as to provide regulation suggestions for social planners more intuitively.Our study explores the platform optimal strategies firstly,and we reveal that when the delivery fee is relatively low,the delivery platform should subsidize the delivery drivers to attract them to join the platform.And it is optimal for the platform to shorten the delivery time and lower the commission when the food price becomes higher;nevertheless,the platform should shorten the delivery time and raise the commission in response to a higher delivery fee.Increases in the food price or delivery fee have non-monotonic effects on the number of fulfilled orders and the platform’s profit.In addition,we solve the socially optimal outcome and find that a socially optimal delivery time is longer than the platform’s preferred length when the delivery fee is high or the negative externality is strong.If the social planner urges the food delivery platform to set a longer delivery time,the platform will charge the delivery drivers a higher commission as a response.Finally,by comparing the optimal decision under different aims and its impacts on the participants(consumers,delivery drivers and the food delivery platform),this paper puts forward some suggestions for social planners to guide the food delivery platform and maintain the rights and interests of delivery drivers.