Shared Mobility for Last-Mile Delivery: Design, Operational Prescriptions and Environmental Impact

Manufacturing and Service Operations Management, Forthcoming

34 Pages Posted: 26 Oct 2016 Last revised: 21 Feb 2020

See all articles by Wei Qi

Wei Qi

McGill University - Desautels Faculty of Management

Lefei Li

Tsinghua University - Department of Industrial Engineering

Sheng Liu

Rotman School of Management

Zuo-Jun Max Shen

University of California, Berkeley - Department of Industrial Engineering & Operations Research (IEOR)

Date Written: October 15, 2017

Abstract

Two socioeconomic transformations, namely, the booms in the sharing economy and retail e-commerce, lead to the prospect where shared mobility of passenger cars prevails throughout urban areas for home delivery services. Logistics service providers as well as local governments are in need of evaluating the potentially substantial impacts of this mode shift, given their economic objectives and environmental concerns. This paper addresses this need by providing new logistics planning models and managerial insights. These models characterize open-loop car routes, car drivers' wage-response behavior, interplay with the ride-share market and optimal sizes of service zones within which passenger vehicles pick up goods and fulfill the last-mile delivery. Based on theoretical analysis and empirical estimates in a realistic setting, the findings suggest that crowdsourcing shared mobility is not as scalable as the conventional truck-only system in terms of the operating cost. However, a transition to this paradigm has the potential for creating economic benefits by reducing the truck fleet size and exploiting additional operational flexibilities (e.g., avoiding high-demand areas and peak hours, adjusting vehicle loading capacities, etc.). These insights are insignificantly affected by the dynamic adjusting of wages and prices of the ride-share market. If entering into this paradigm, greenhouse gas emissions may increase due to prolonged car trip distance; on the other hand, even exclusively minimizing operating costs incurs only slightly more emissions than exclusively minimizing emissions.

Keywords: Logistics Planning, Shared Mobility, Open-Loop Vehicle Routing Problem, Sustainability

Suggested Citation

Qi, Wei and Li, Lefei and Liu, Sheng and Shen, Zuo-Jun Max, Shared Mobility for Last-Mile Delivery: Design, Operational Prescriptions and Environmental Impact (October 15, 2017). Manufacturing and Service Operations Management, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2859018 or http://dx.doi.org/10.2139/ssrn.2859018

Wei Qi

McGill University - Desautels Faculty of Management ( email )

1001 Sherbrooke Street West
Montreal, Quebec H3A 1G5
Canada

Lefei Li

Tsinghua University - Department of Industrial Engineering ( email )

Beijing
China

Sheng Liu

Rotman School of Management ( email )

105 St. George st
Toronto, ON M5S 3E6
Canada

Zuo-Jun Max Shen (Contact Author)

University of California, Berkeley - Department of Industrial Engineering & Operations Research (IEOR) ( email )

IEOR Department
4135 Etcheverry Hall
Berkeley, CA 94720
United States

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