Balance between Profit and Fairness : Regulation of Online Food Delivery (OFD) Platforms
The rapidly developing online food delivery business is a novel “ecosystem” involving digital platforms, restaurants, delivery-workers, and customers. Continuous expansion of its market size is accompanied by problems of economic fairness such as “wage distribution” and “revenue sharing”. This study proposes an overall modeling framework to examine how regulators could best achieve optimal regulatory balance between “protecting the restaurant margins” and “protecting the interests of delivery-workers”. We show that regulatory measures designed for protecting restaurants achieve better policy effects. Policies that increase wages can benefit delivery-workers under certain conditions but come at the expense of the ecosystem’s other stakeholders. By contrast, a policy of commission cap could increase restaurants’ revenues and the ecosystem’s overall welfare. Limiting the number of online restaurants has a similar effect. The results of this study provide feasible insights for improving the regulatory effectiveness of digital platforms in fast-evolving businesses such as prepared food delivery
Year of publication: |
[2023]
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Authors: | Ji, Xu ; Li, Xuerong ; Wang, Shouyang |
Publisher: |
[S.l.] : SSRN |
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