What is the potential for bicycle crowdshipping? Price of services is still a major issue

Wicaksono, Satrio (TU Delft Civil Engineering and Geosciences; TU Delft Transport and Planning) explored the potential for bicycle crowdshipping. This would be a potential alternative for future urban parcel deliveries. Understanding the supply and demand characteristics is essential for bicycle crowdshipping platforms to sustain its network of customers and couriers.
The case study using cyclists in Delft as sample discovered market share of 14-26% if at least 0.5% of the cyclists would register themselves as an occasional courier. The study revealed that along with the increased membership rate in bicycle crowdshipping platform, the price will go down and the market share would increase.

Demand and supply

The main challenge in the crowdshipping realm is to maintain a sustainable network of customers (demand) and couriers (supply). To help to resolve the challenge, this research offers a comprehensive approach to examine the market potential of bicycle crowdshipping through concurrent evaluation of its supply and demand side, which thus far has been absent from the literature. By deploying discrete choice models, the study generated supply, demand, and market equilibrium model to aid crowdshipping platform in understanding influential service attributes and its effect on the market penetration level. The research concluded adjustable delivery time window as a key differentiating attribute to entice customer preference towards crowdshipping.

Crowdshipping

Bicycle crowdshipping emerged as a solution for urban parcel deliveries. The term crowdshipping itself means utilizing the existing capacity of travelers in the transport network to also carry goods along with their journey. Crowdshipping is highly potential for e-commerce delivery as it deals with the package in an individual way and offers flexible delivery condition. In the Netherlands, 2.8 million cycling trips are made daily, and this would become a ground to develop a network of crowdsourced bike couriers.

Market potential

The study identified the potential market scope for bicycle crowdshipping service. In terms of spatial context, bicycle crowdshipping can step into local and last mile delivery. The former implies that bicycle crowdshipping serves home delivery by cooperating with local stores that provide click and collect service. The latter requires bicycle crowdshipping to establish a partnership with urban delivery hubs or parcel pickup points. Regarding shipment characteristics, bicycle crowdshipping could carry up to 25 kilograms of parcels with volume up to 60 dm3.

Bicycle crowdshipping is not the most suitable option for consolidated delivery. Considering potential future applications, it was concluded that last mile delivery from pickup points and local stores would be the selected market scope for this bicycle crowdshipping study; bicycle crowdshipping can capture the advantage of the niche market for local express delivery. The study only looked at the potential for B2C shipments, not B2B shipments.
Local-for-local deliveries offers smaller demand volume which highly depends on the density and diversity of local shops in proximity. On the good side, local delivery service offers more practicality for starting a bicycle crowdshipping service. It requires less infrastructure as no hub is needed.

Price is key

According to the model, the demand side of bicycle crowdshipping was found to be highly elastic towards price, while oppositely supply side of crowdshipping is rather inelastic towards monetary compensation. Elasticity and sensitivity analysis concluded that demand for bicycle crowdshipping is highly sensitive towards price, especially within a price of 4 euro and above.

Competition between bicycle crowdshipping and conventional shipping was evident, implying that bicycle crowdshipping should be responsive to market dynamics by adjusting its service level. This way bicycle crowdshipping could retain its competitiveness compared to other delivery options.

Satrio scored a very high grade, a nine (9), for his research report, presentation and defense. The report is a very valuable report on local-for-local last mile deliveries from both a supply and demand perspective.

Read more about the study here.