Cost-Sharing Mechanism Design for Ride-Sharing

In this paper, we focus on the cost-sharing problem for ride-sharing that determines how to allocate the total ride cost between the driver and the passengers. We identify the properties that a desirable cost-sharing mechanism should have and develop a general framework which can be used to create specific cost-sharing mechanisms. We propose specific mechanisms and analyze their relative advantages and disadvantages so that service providers can select a mechanism according to their different needs. In addition, we incorporate the value of time by providing discount methods. We evaluate our approach using real traffic data from the downtown Los Angeles area. Our results show that each proposed mechanism has its unique advantages and that the discount methods can successfully reduce the number of no-passenger vehicles for a large ride-sharing system.


Transportation Research Part B: Methodological, volume 150, pages 410-434, 2021.