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:
  • Conference:
  • Date: 2019


  • English

Media Info

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

Subject/Index Terms

Filing Info

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