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The Value of Optimization in Dynamic Ride-Sharing: a Simulation Study in Metro Atlanta

Author

Listed:
  • Agatz, N.A.H.
  • Erera, A.
  • Savelsbergh, M.W.P.
  • Wang, X.

Abstract

Smartphone technology enables dynamic ride-sharing systems that bring together people with similar itineraries and time schedules to share rides on short-notice. This paper considers the problem of matching drivers and riders in this dynamic setting. We develop optimization-based approaches that aim at minimizing the total system-wide vehicle miles and individual travel costs. To assess the merits of our methods we present a simulation study based on 2008 travel demand data from metropolitan Atlanta. The simulation results indicate that the use of sophisticated optimization methods instead of simple greedy matching rules may substantially improve the performance of ride-sharing systems. Furthermore, even with relatively low participation rates, it appears that sustainable populations of dynamic ride-sharing participants may be possible even in relatively sprawling urban areas with many employment centers.

Suggested Citation

  • Agatz, N.A.H. & Erera, A. & Savelsbergh, M.W.P. & Wang, X., 2010. "The Value of Optimization in Dynamic Ride-Sharing: a Simulation Study in Metro Atlanta," ERIM Report Series Research in Management ERS-2010-034-LIS, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    • Handle: RePEc:ems:eureri:20456
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    References listed on IDEAS

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    1. Agatz, N.A.H. & Erera, A. & Savelsbergh, M.W.P. & Wang, X., 2010. "Sustainable Passenger Transportation: Dynamic Ride-Sharing," ERIM Report Series Research in Management ERS-2010-010-LIS, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    2. Frank M. Bass, 1969. "A New Product Growth for Model Consumer Durables," Management Science, INFORMS, vol. 15(5), pages 215-227, January.
    3. Tsao, H.-S. Jacob & Lin, Da-Jie, 1999. "Spatial and Temporal Factors in Estimating the Potential of Ride-sharing for Demand Reduction," Institute of Transportation Studies, Research Reports, Working Papers, Proceedings qt2p57q0c9, Institute of Transportation Studies, UC Berkeley.
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    Cited by:

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    Keywords

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    JEL classification:

    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • M - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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