Assignment and Pricing of Shared Rides in Ride-Sourcing using Combinatorial Double Auctions

Abstract

Transportation Network Companies employ dynamic pricing methods at periods of peak travel to incentivise driver participation and balance supply and demand for rides. Surge pricing multipliers are commonly used and are applied following demand and estimates of customer and driver trip valuations. Combinatorial double auctions have been identified as a suitable alternative, as they can achieve maximum social welfare in the allocation by relying on customers and drivers stating their valuations. A shortcoming of current models, however, is that they fail to account for the effects of trip detours that take place in shared trips and their impact on the accuracy of pricing estimates. To resolve this, we formulate a new shared-ride assignment and pricing algorithm using combinatorial double auctions. We demonstrate that this model is reduced to a maximum weighted independent set model, which is known to be APX-hard. A fast local search heuristic is also presented, which is capable of producing results that lie within 10% of the exact approach for practical implementations. Our proposed algorithm could be used as a fast and reliable assignment and pricing mechanism of ride-sharing requests to vehicles during peak travel times.

arXiv comment12 pages, Ride-Sharing, Combinatorial Double Auctions, Assignment, Dynamic Pricing

References in corpus (5)

• OSMnx: New Methods for Acquiring, Constructing, Analyzing, and Visualizing Complex Street Networks
• Quantifying the benefits of vehicle pooling with shareability networks
• Computationally Feasible VCG Mechanisms
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Cited by in corpus (3)

• Mechanism Design Theory in Control Engineering: A Tutorial and Overview of Applications in Communication, Power Grid, Transportation, and Security Systems
• Social Resource Allocation in a Mobility System with Connected and Automated Vehicles: A Mechanism Design Problem
• Regulating Transportation Network Companies with a Mixture of Autonomous Vehicles and For-Hire Human Drivers