Abstract Ridesourcing service provided by transportation network companies (TNCs) has been shown by various studies to deteriorate traffic conditions as they increase the number of unoccupied vehicles on the road. Ridesharing is an alternate service where passengers with similar itineraries may be pooled together in a combined trip, which could counteract some of the negative externalities of ridesourcing. Passengers are generally compensated with a price discount for their inconveniences experienced in shared trips. We therefore propose a dynamic discount pricing strategy for the platform to incentivize ridesharing. This study explicitly considers the passengers to be cost and service quality sensitive, impatient, and have a choice to decline services offered by the platform. The strategy is integrated in the matching algorithm which maximizes the platform’s profit with given batches of waiting passengers and idle vehicles, and strategically offers shared trips to selected passengers with varying price discounts. We show that the adoption of the dynamic discount pricing strategy creates substantial economic benefit for the platform in both the short and long terms. The drivers are also shown to benefit from the strategy as they spend more time serving passengers. The strategy reduces the fleet size required to service the same number of passengers and is beneficial to all stakeholders.

    Highlights Tailored price discounts for individual passengers in shared rides are optimized. Non-equilibrium models are developed with time- and space-varying discounts. Dynamic discount pricing strategy incentivizes ridesharing while maximizing platform profit. Passengers are explicitly considered to be cost and service quality sensitive, impatient, with a service decline choice. The strategy reduces the fleet size required to service the passengers and is beneficial to all stakeholders.


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    Title :

    Incentivizing shared rides in e-hailing markets: Dynamic discounting


    Contributors:


    Publication date :

    2022-09-02




    Type of media :

    Article (Journal)


    Type of material :

    Electronic Resource


    Language :

    English




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