economics Practical Magic

Live-tracking your pizza doesn't actually make it arrive faster; the real problem is how the drivers are being paid.

March 20, 2026

Original Paper

Why Real-Time Delivery Platforms Fail Without Incentive Design Incentives, Not Visibility, Determine Platform Performance

SSRN · 6438921

The Takeaway

Most users and managers assume that knowing exactly where a driver is at every second will solve logistics delays. However, the study reveals that 'visibility' is a red herring; without incentives that account for probabilistic task feasibility, platforms will fail even with perfect real-time data.

From the abstract

<p>Real-time delivery platforms have become central to modern logistics, healthcare, and on-demand services. These systems promise efficiency through live tracking, dynamic routing, and instantaneous dispatch. Yet despite widespread adoption of real-time visibility tools, many platforms continue to experience persistent failures, including missed service windows, workforce churn, rising costs, and inconsistent service reliability.</p> <p>This paper argues that these failures are not primarily dr