Modeling an on-demand meal delivery system with human couriers and autonomous vehicles in a spatial market

This paper investigates the impacts of introducing autonomous vehicles (AVs) into an on-demand meal delivery system at a strategic level. The proposed model consists of (i) a microscopic physical model describing the delivery process for bundled orders and (ii) a macroscopic network equilibrium model characterizing the interactions among customers, human couriers (HCs), and AVs, as well as couriers’ repositioning behaviors in the market. A tailored algorithm based on the Alternating Direction Method of Multiplier (ADMM) is developed to solve the platform’s optimal pricing and maximize its profit. To investigate the impact of AV operations, we test three AV distribution rules, i.e., distributing AVs evenly in the space (Rule 0), proportional to demand (Rule 1), and inversely proportional to demand (Rule 2). The numerical experiments show that Rule 2 archives the maximum platform profit, along with the highest service throughput and the hourly earning rate of HCs. Nevertheless, the numerical experiments adopting the parameters calibrated by current market conditions show that the employment of AVs does not show significant benefits to the platform or other stakeholders. It can only generate a higher platform profit when the AV operation cost is lower than HCs’ hourly earnings in a purely labor-based MDS system. As the AV fleet size expands, the improvement of service quality is rather minor meanwhile the hourly earning of HCs drops substantially.