Pricing and optimization in shared vehicle systems: an approximation framework

DOI10.1287/OPRE.2021.2165MaRDI QIDQ5095174zbMATH OpenOpenAlexFDO

Authors Siddhartha Banerjee, Daniel Freund, Thodoris Lykouris

Publication date 5 August 2022

Published in Operations Research (Search for Journal in Brave)

Full work available at URL https://arxiv.org/abs/1608.06819

zbMATH Keywords

control of queueing networkspricing and revenue managementsharing economy

Mathematics Subject Classification ID

Queueing theory (aspects of probability theory) (60K25) Performance evaluation, queueing, and scheduling in the context of computer systems (68M20) Formal languages and automata (68Q45) Inventory, storage, reservoirs (90B05) Transportation, logistics and supply chain management (90B06) Queues and service in operations research (90B22)

Abstract: Optimizing shared vehicle systems (bike/scooter/car/ride-sharing) is more challenging compared to traditional resource allocation settings due to the presence of emph{complex network externalities} -- changes in the demand/supply at any location affect future supply throughout the system within short timescales. These externalities are well captured by steady-state Markovian models, which are therefore widely used to analyze such systems. However, using such models to design pricing and other control policies is computationally difficult since the resulting optimization problems are high-dimensional and non-convex. To this end, we develop a emph{rigorous approximation framework} for shared vehicle systems, providing a unified approach for a wide range of controls (pricing, matching, rebalancing), objective functions (throughput, revenue, welfare), and system constraints (travel-times, welfare benchmarks, posted-price constraints). Our approach is based on the analysis of natural convex relaxations, and obtains as special cases existing approximate-optimal policies for limited settings, asymptotic-optimality results, and heuristic policies. The resulting guarantees are non-asymptotic and parametric, and provide operational insights into the design of real-world systems. In particular, for any shared vehicle system with $n$ stations and $m$ vehicles, our framework obtains an approximation ratio of $1+(n-1)/m$, which is particularly meaningful when $m/n$, the average number of vehicles per station, is large, as is often the case in practice.

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Cited in

(18)

• The optimal taxi fleet size structure under various market regimes when charging taxis with link-based toll
• Matching functions for free-floating shared mobility system optimization to capture maximum walking distances
• Exact solutions to a carsharing pricing and relocation problem under uncertainty
• B2C online ride-hailing pricing and service optimization under competitions
• Approximate dynamic programming for planning a ride-hailing system using autonomous fleets of electric vehicles
• Pricing and allocation algorithm designs in dynamic ridesharing system
• Regulating vehicle sharing systems through parking reservation policies: analysis and performance bounds
• An Application of the Aumann-Shapley Prices for Cost Allocation in Transportation Problems
• A Probabilistic Approach to Growth Networks
• A combinatorial auction‐based approach for ridesharing in a student transportation system
• Optimal reservation control strategies in shared parking systems considering two types of customers
• Technical Note—Pricing in On-Demand and One-Way Vehicle-Sharing Networks
• Dynamic pricing for shared mobility systems based on idle time data
• Price optimization for round trip car sharing
• Extreme values in closed networks
• Balancing profit and traveller acceptance in ride-pooling personalised fares
• Leveraging reusability: improved competitive ratio of greedy for reusable resources
• Dynamic pricing of ride-hailing platforms considering service quality and supply capacity under demand fluctuation

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