Leveraging the Experience : Exploration and Exploitation in Gig Worker Learning Process

On-demand delivery through gig platforms is ushering in a new era of business operations, workforce management, and customer experiences. This paper seeks to investigate how experience affects worker performance in this new business setting, which has not yet been studied in the prior learning literature. Utilizing data from one leading on-demand delivery platform in Asia, we find that, consistent with the literature, experience improves the operational outcome by reducing delivery time. However, interestingly, at an earlier stage, when gig workers' experience is low, increasing experience decreases worker productivity (i.e., earnings) and service quality (i.e., order delays). To understand these findings, we propose an exploration-exploitation behavioral mechanism due to the flexible working conditions under this new business model. Specifically, at the exploration stage, gig workers deliver more individual (non-batched) orders to visit new recipient regions and obtain more customer exposure. This exploration behavior at the low experience stage reduces worker productivity and quality outcomes. However, after gig workers gain enough experience through the exploration stage, they tend to batch more orders and converge to their familiar recipient regions and stores. At this exploitation stage, experience improves worker performance outcomes. We also consider learning effects based on two types of experience closely related to the practice of the gig workforce and find that if a gig worker obtains more experience from batched orders and peak hour orders, her service quality can be enhanced