Algorithmic Decision-making on Delivery Platforms
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Bachelor's thesis
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Date
2024
Department
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Mcode
Degree programme
Tieto- ja palvelujohtaminen
Language
en
Pages
21
Series
Abstract
The usage of algorithms as task allocators, which can reduce the need for human management, is common on modern crowdsourced service platforms. By using on-demand delivery service platform Wolt as a case company, this thesis looks at the delivery task allocation process and determines how the case company utilizes algorithms in its delivery operations. The objective is to find how the delivery task allocation algorithm selects and evaluates data and makes decisions based on selected criteria, as well as how the functions compare to those of a human manager. The way data is processed in delivery task allocation is analyzed using the information processing framework provided by Parasuraman & Wickens (2018), which divides information processing into four stages. The level of automation in each information processing stage is determined based on framework provided by Vagia et al. (2016) Finally, the functions of the algorithm are compared to managerial roles determined by Mintzberg (1973). The study finds that the task allocation process is highly automated, with delivery offer acceptance or rejection being the only phase in which a human interacts with the system. To provide the most efficient delivery experience for the consumer, the algorithm strives to anonymize couriers and make task allocation decisions based purely on data related to availability, location, vehicle and special capabilities. To provide couriers with reasonable fees for completed deliveries, task payments are determined by multiple factors as well, including delivery distance, location type, weather conditions and type of order. Some of the algorithm’s functions are found to be similar to those of a human manager, especially in roles relating to decision-making and relaying information. The findings are mainly applicable to the selected case company only. The study concentrates on the technical aspects of the decision-making process, mainly from the perspective of the platform. Avenues for further research can be found from courier or consumer acceptance and perceived fairness of the decisions made by the algorithm.Description
Thesis advisor
Movarrei, RezaKeywords
algorithms, decision-making, on-demand delivery, platform business model, information processing