Oversupply of Fissured Workforce and Operational Inefficiency: Evidence from Grab-Mode Competition in Food Delivery

Food delivery platforms assign orders to couriers in two main ways. In dispatch mode, the platform's algorithm assigns each order to a courier; in grab mode, crowdsourced couriers compete to pick the orders they want. This project asks how grab-mode competition affects delivery performance when couriers are abundant relative to orders. The core idea is that when there are many couriers per order, couriers rush to grab whatever is available in order to secure income, leaving little time to judge whether an order suits them or to plan their route. We hypothesize that (1) a higher courier-to-order ratio shortens the time it takes for an order to be grabbed, and (2) shorter grab times lead to longer delivery delays. The analysis uses data from Meituan, one of the largest food delivery platforms in China, covering over 650,000 orders. Because the data only record which courier took which order, local courier density is not directly observed. We estimate it by reconstructing where couriers were over time from their recorded locations and mapping them onto a grid of the city; checked against a limited sample of actual candidate-courier records, the estimate fits closely (R² = 0.988). The data are then organized as a panel by grid cell and hour, and the effect of grab time on delay is estimated by two-stage least squares, using courier density as an instrument for grab time. The results support both hypotheses: an oversupply of couriers reduces order acceptance time but increases delivery delays. Rapid grabbing appears to reflect competitive pressure rather than operational readiness. For platform design, this suggests moderating competition where couriers are dense and giving couriers time to assess orders before accepting. More broadly, abundant labor without coordination degrades performance rather than adding resilience.