The optimal government policy towards carpooling market: A differential game analysis considering carbon emission reduction

As an emerging mode of shared mobility, carpooling can shorten the total urban transport mileage, thereby reduce the overall carbon emission in the e-hailing industry. However, the lack of public interest and ambiguous promotional strategies towards carpooling, profitability concerns from the e-hailing company, and ineffective government policies, contribute to a low adoption rate. It is imperative to present a clear view on how the government interact with the e-hailing company and how to foster their collaboration to reduce carbon emissions while providing enough financial incentives to the carpooling company. This research formulates a theoretical framework of dynamic-differential-game to analyze how the promotion initiative, R&D effort, reward mechanism, subsidy to the e-hailing company as well as to the passenger affect the dynamic trajectory of the carpooling market and the emission reduction under different policies. The results show that: (1) The benefits of emission reduction and the price per kilometer positively enhance the promotion of carpooling. The costs of promoting, and passengers’ reliance on private e-hailing options, can hinder the promotion; (2) While cost-sharing can encourage the e-hailing company to improve carpooling efficiency, carpooling passenger subsidies more directly boost user demand and are more effective in reducing emissions; (3) To maximize profitability, the e-hailing company should slightly intensify its effort in carpooling technology R&D; (4) The policies have a positive impact on emission reduction, but when the policies become overly generous, the overall benefit of the government and the e-hailing company will show a downward trend.