PACIS 2019 Proceedings

Abstract

For companies providing grocery and food delivery, some choose to become two-sided platforms and let part-time people deliver for consumers. While some platforms also hire full-time deliverers, some rely solely on part-time deliverers. It is crucial to explain the difference and identify factors to be considered in making the staffing decision. We consider a delivery platform who may hire full-time deliverers or subsidizing part-time ones to induce their participation. While solving the staffing problem, it also solves the pricing problem with respect to consumers by taking cross-side network externality into consideration. We find that hiring both part-time and full-time employees is suboptimal when the wage for full-time deliverers is too high. Interestingly, hiring only full-time employees is never optimal no matter how low the wage is. Our analysis helps us justify the popularity of delivery platforms and may guide platform deliverers to determine their staffing policies.

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