Pricing, Matching Probability, and Detour Cost in a Ride-Sharing Market

Due to the scarcity of vehicles, some ride-sourcing companies are promoting dynamic ride-sharing services. Unlike traditional ride-sharing programs, the dynamic ride-sharing services do not require passengers to pre-arrange their schedules of routes and time. Without prearrangement, it is not guaranteed that a ride in the dynamic ride-sharing system will be paired with a second ride. In this paper, the mean probability of rides being matched with other rides is named as the matching probability, which is dominated by the ride-sharing passenger demand and the detour time. The matching probability, detour time and passenger demand are endogenously interacted: the increase of passenger demand improves the matching probability, which in turn increases the detour time and further discourages passengers from choosing ride-sharing services. To model these complex interactions, this study proposes an equilibrium model in which passengers make mode choices among ride-sharing service, normal ride-sourcing service and public transit service. On the other hand, the willingness of drivers to work is determined by their expected mean earnings, which come from both the ride-sharing service and normal ride-sourcing service. The platform impacts the market equilibrium by two essential control variables, i.e. the ride-sharing pricing and matching strategies. To help the ride-sourcing platform makes better decisions, the authors discuss the optimal ride-sharing pricing and matching strategies for maximizing platforms’ profit or social welfare. It is found that introducing ride-sharing services into the ride-sourcing market can lead to a win-win-win situation, where the platform, passengers and drivers are all better off.

• Supplemental Notes:
  • This paper was sponsored by TRB committee AP020 Standing Committee on Emerging and Innovative Public Transport and Technologies.
• Corporate Authors:

  Transportation Research Board

  ,    
• Authors:
  • Yang, Hai
  • Ke, Jintao
  • Li, Xinwei
  • 0000-0002-6262-5343
  • Wang, Hai
• Conference:
  • Transportation Research Board 98th Annual Meeting
  • Location: Washington DC, United States
  • Date: 2019-1-13 to 2019-1-17
• Date: 2019

Language

• English

Media Info

• Media Type: Digital/other
• Features: References;
• Pagination: 5p

Subject/Index Terms

• TRT Terms: Costs; Detours; Mode choice; Pricing; Ridesharing
• Subject Areas: Economics; Highways; Society;

Filing Info

• Accession Number: 01697989
• Record Type: Publication
• Report/Paper Numbers: 19-00618
• Files: TRIS, TRB, ATRI
• Created Date: Mar 1 2019 3:51PM