Coordination of competitive robots and workers in on-demand logistics services: Filling in the price of equity

The emergence of robotic technologies threatens to replace human workers in on-demand logistics services, such as autonomous vehicles in ride-hailing and drones in delivery. In platforms currently operating with all-human workforces, we identify a notable inefficiency⏤termed the “price of equity” (POE)⏤stemming from indiscriminate order dispatching that disregards differences in order profitability. Therefore, robot threats can possibly be resolved along with the POE if the platform strategically deploys robots to handle less profitable orders, such as those involving high pickup difficulties or on-road congestion, and reserves workers for more valuable assignments in the mixed fleets. To explore this potential, we begin with developing an analytical model to estimate the POE, comparing the all-inclusive strategy and selective order admission based on order profitability. Real-world data reveal a maximum potential loss of 24% in platform revenue during demand peaks. Motivated by this inefficiency, we propose a threshold matching strategy for a platform in charge of both human workers and robots, while ensuring uniform service levels for all customers. This operational approach shows the potential to safeguard workers’ welfare amid robot penetration, and we substantiate that with an appropriate number of robots, the price of equity in workers’ earnings can be fully restored. Concerning the fleet size decision of robots, we consider strict public regulations in the transition stage where strategic platforms have to protect workers’ welfare. Relative to the maximum allowable fleet that mandates no harm to workers, platforms may deem robot adoption profitable only when the technology is sufficiently mature (i.e., unit robot costs are sufficiently low). Through a cross-period coordination scheme combined with a subsidy that taxes part of workers’ surplus from robotaxi adoption to fund robot procurement, the maximum coordinating robot procurement cost for socially beneficial adoption doubles from approximately 150 to 300 thousand CNY per vehicle. Under such favorable per-robot costs, platforms spontaneously introduce robots, enhancing customer service levels without adverse effects on workers’ welfare.