Uber-izing Dabbawala: Enabling Massive On-Demand Delivery via an Urban Public Transportation Network

Abstract

With the rapid growth of omnichannel retailing and the takeaway delivery economy, the classic point-to-point mode for on-demand delivery is significantly deficient in delivery capacity, traveling distance, dispatching complexity, and traffic management. Inspired by the success of Dabbawala, a historical Indian company for lunch delivery, we propose a novel public on-demand delivery service system that uses the public transit network to satisfy stochastic delivery demands. In particular, the proposed system includes a public transit network for intermediate transshipment, as well as couriers with e-bikes for terminal pick-up and drop-off. With the background of radial public transit network, our research aims to generate structural system design, including the number of lines and stops of the public transit network that are applied in our system, to minimize the unsatisfied demands as well as couriers' terminal delivery distance. Solving the integrated system optimization problem relies on specific operational details, especially the allocation strategies of lines' capacity and the couriers' terminal traveling modes. For the prior, we propose a novel flexible design, called dual long-chain design, to improve flexibility. For the latter, we propose an elegant approximation of the optimal service region partitioning, considering the expected terminal delivery distance. Based on the theoretical results of operational strategies, we simplify the integrated optimization problem and propose a pseudo-polynomial algorithm. Finally, we validate the advantage of the proposed system over classic point-to-point delivery in satisfying demands and reducing costs through extensive numerical experiments, providing  valuable managerial insights in handling massive on-demand delivery demands and utilizing the idle capacity of the public transit system.

Keywords: On-demand delivery, public transport network, delivery system design, service region partition, process flexibility