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Path-based dynamic pricing for vehicle allocation in ridesharing systems with fully compliant drivers

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  • Lei, Chao
  • Jiang, Zhoutong
  • Ouyang, Yanfeng

Abstract

Rapidly advancing on-demand ridesharing services, including those with self-driving technologies, hold the promise to revolutionize delivery of mobility. Yet, significant imbalance between spatiotemporal distributions of vehicle supply and travel demand poses a pressing challenge. This paper proposes a multi-period game-theoretic model that addresses dynamic pricing and idling vehicle dispatching problems in the on-demand ridesharing systems with fully compliant drivers/vehicles. A dynamic mathematical program with equilibrium constraints (MPEC) is formulated to capture the interdependent decision-making processes of the mobility service provider (e.g., regarding vehicle allocation) and travelers (e.g., regarding ride-sharing and travel path options). An algorithm based on approximate dynamic programming (ADP), with customized subroutines for solving the MPEC, is developed to solve the overall problem. It is shown with numerical experiments that the proposed dynamic pricing and vehicle dispatching strategy can help ridesharing service providers achieve better system performance (as compared with myopic policies) while facing spatial and temporal variations in ridesharing demand.

Suggested Citation

  • Lei, Chao & Jiang, Zhoutong & Ouyang, Yanfeng, 2020. "Path-based dynamic pricing for vehicle allocation in ridesharing systems with fully compliant drivers," Transportation Research Part B: Methodological, Elsevier, vol. 132(C), pages 60-75.
    • Handle: RePEc:eee:transb:v:132:y:2020:i:c:p:60-75
    DOI: 10.1016/j.trb.2019.01.017
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    Cited by:

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    2. Chen, Xiqun (Michael) & Zheng, Hongyu & Ke, Jintao & Yang, Hai, 2020. "Dynamic optimization strategies for on-demand ride services platform: Surge pricing, commission rate, and incentives," Transportation Research Part B: Methodological, Elsevier, vol. 138(C), pages 23-45.
    3. Liu, Yining & Ouyang, Yanfeng, 2023. "Planning ride-pooling services with detour restrictions for spatially heterogeneous demand: A multi-zone queuing network approach," Transportation Research Part B: Methodological, Elsevier, vol. 174(C).
    4. Ouyang, Yanfeng & Yang, Haolin, 2023. "Measurement and mitigation of the “wild goose chase” phenomenon in taxi services," Transportation Research Part B: Methodological, Elsevier, vol. 167(C), pages 217-234.
    5. Yi Cao & Shan Wang & Jinyang Li, 2021. "The Optimization Model of Ride-Sharing Route for Ride Hailing Considering Both System Optimization and User Fairness," Sustainability, MDPI, vol. 13(2), pages 1-17, January.
    6. Rajendran, Suchithra & Srinivas, Sharan, 2020. "Air taxi service for urban mobility: A critical review of recent developments, future challenges, and opportunities," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 143(C).
    7. Daganzo, Carlos F. & Ouyang, Yanfeng & Yang, Haolin, 2020. "Analysis of ride-sharing with service time and detour guarantees," Transportation Research Part B: Methodological, Elsevier, vol. 140(C), pages 130-150.
    8. Meijian Yang & Enjun Xia, 2021. "A Systematic Literature Review on Pricing Strategies in the Sharing Economy," Sustainability, MDPI, vol. 13(17), pages 1-28, August.

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