335 / 2024-04-24 15:44:45

Gig or Employee? Platform's Joint Staffing and Pricing Decisions Under Hybrid-staffing Mode

hybrid workforce, on-demand staffing, surge pricing

On-demand platforms are hiring both full-time employees and part-time gig workers to provide service in some novel settings. To understand the operational strategies that platforms should adopt when managing a hybrid labor force, we analyze a two-period model where on-demand platform serves the fluctuating consumer demand through the use of employees and gig workers. Our analysis reveals the following major findings. First, in a hybrid-staffing mode, the platform's decision to hire only employees (gig workers) or both depends on the salary paid to employees and the size of the gig workers' labor pool. When both salary cost and labor pool size are at a moderate level, the platform tends to hire both employees and gig workers. With the increased likelihood of high demand state or the expansion of demand surge, the platform is more inclined to employ both types of service providers. Second, under the hybrid-staffing mode, gig workers are not only utilized as an additional ``top-off'' resource during high demand states, but also serve in ``dual roles'' in both high and low demand states. Third, in the hybrid staffing mode, all the stakeholders involved—the platform, the labor force (employees and gig workers), and the consumers—are never at a disadvantage compared to the single-staffing mode with only gig workers. Moreover, when salary cost is exceedingly high, all the stakeholders are better-off in the hybrid-staffing mode than in the single-staffing mode with only employees. Our results provide managerial implications for the on-demand platform's joint staffing and pricing decisions.