Pushcarts to Platforms: Measuring Food Delivery Apps’ Effect on Street Vendors’ Location Preferences in the Global South. Case Study: Surakarta, Indonesia

Abstract

How does online commerce affect the offline presence of retail, food, and beverage (F&B) establishments in cities? While extensive literature exists on e-commerce’s effect on the retail industry, its impact on retailers’ location preference and in particular street vendors in the Global South has been less explored. E-commerce and food delivery apps (FDA) change search costs for customers and could therefore change the desirability of locations for retailers. Yet, most existing retail economic studies are specific to brick-and-mortar establishments in the Western urban context, despite street vendors’ rapid adoption of online commerce and the Asia Pacific region’s lead in the global e-commerce growth rate even before the COVID-19 pandemic.

This thesis focuses on the effect of FDA on the growth trend and location preferences of F&B street vendors in Indonesia, using the city of Surakarta as a case study. By using spatial analysis and interviews, the thesis analyzes four hypotheses about the changes in street vendors’ presence, clustering, and location preferences based on street vendor location data collected in 2014 and 2019 on the same set of streets. The results show a negligible change in location preferences for street vendors of all kinds and a more pronounced change for F&B vendors after controlling for street vendor growth. Without growth control, FDA has a minimal effect on the change of F&B street vendors’ clustering and location preference which was also validated by the interviews. Finally, the thesis discusses data limitations and future opportunities that could inform policies on street vending and online delivery services.