When Zhuoxin “Allen” Li revises lesson plans each semester, he’s not just tweaking small details. He’s making sure technology hasn’t upended his entire curriculum.
“I spend nearly two months updating all my examples,” says Li with a laugh. “Teaching digital strategy, things get quickly outdated. But it’s a fun process.”
An associate professor of operations and information management, Li joined the WSB faculty in 2022 and teaches graduate-level digital strategy and data technology classes—both informed by his research on digital platforms.
With the proliferation of technology, businesses have flocked to online platforms like marketplaces, social media sites, and mobile operating systems—all digital spaces that connect suppliers and consumers. When businesses and platforms work in harmony, both parties win. But as platforms grow, friction can ensue as their business interests evolve and diverge.
“We have digital platforms that are getting larger and are frequently possessing much more power,” says Li, who is also the Michael and Mary Sue Shannon Professor at WSB. “I’m researching how we can create a more sustainable platform ecosystem that creates economic value for not just the biggest players, but also the much larger number of smaller participants.”
One sticky example that’s become extra visible in recent years is the rift between restaurants and food delivery platforms. While sites like Grubhub and DoorDash deliver food to our homes, they also deliver hefty fees to restaurants, which are already operating with low profit margins.
“Food delivery is a particularly challenging example,” says Li. “A platform like Amazon can deliver a large number of orders on the same truck, while food delivery is point-to-point. After factoring in all the costs and fees associated with that, there’s little left on the table for restaurants.”
That’s caught the attention of policymakers, who are seeking ways to support restaurants in the wake of the COVID-19 pandemic. Across the country, cities are capping the fees platforms can charge independent restaurants. While Li acknowledges the intent, his research has shown the move has backfired, with platforms shifting their tactics to promote purchase from chain restaurants or eateries outside of city limits where fee caps are not in place—thus reducing exposure of the restaurants the policies sought to help.
“I’m researching how we can create a more sustainable platform ecosystem that creates economic value.”
—Allen Li
“So, we have to think about other ways to improve the efficiency of the business to achieve certain economic scale,” says Li, who continues to build upon this research, thanks to support from the National Science Foundation and a prestigious Faculty Early Career Development Award.
“That could include considering self-driving cars or even drone deliveries in the future,” he adds.
Meanwhile, as customers return to in-person dining, demand for delivery remains high—meaning restaurants must now contend with simultaneous dine-in and to-go orders during peak service times. To ease the burden on kitchens, Li is using platform data to develop an approach that flattens demand spikes: identify the most flexible customers and offer them discounts for placing food orders outside of the busiest hours.
“My research is looking into historical purchase patterns to come up with the optimal design of this promotion,” says Li. “This will ideally help restaurants better utilize their capacity.”
As for the future of Li’s research on food delivery and other digital platforms, a new factor is emerging: societal impact. Recently, many platforms have introduced identifying tags like “small business” or “Black-owned” to help customers support businesses that align with their values.
“For platforms, the priority is about making profit, but there’s now a question of whether they should also consider the societal value they are creating and if that might eventually benefit their profitability,” Li says. “I’m looking at whether companies can be doing better by doing good.”