Equilibrium queueing analysis in a ride-hailing service with sharing option

This paper examines different car-sharing models offered by ride-hailing firms. In the traditional model, customers are served individually. In the sharing-only model, all customers are willing to share the ride with other customers. In the hybrid model, customers may choose either individual or sha...

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Main Authors: Wang, Jianfu, Chua, Geoffrey A., Sainathan, Arvind, Vijayendiran, Akshay
Other Authors: Nanyang Business School
Format: Article
Language:English
Published: 2023
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Online Access:https://hdl.handle.net/10356/166198
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Institution: Nanyang Technological University
Language: English
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spelling sg-ntu-dr.10356-1661982023-05-19T07:31:16Z Equilibrium queueing analysis in a ride-hailing service with sharing option Wang, Jianfu Chua, Geoffrey A. Sainathan, Arvind Vijayendiran, Akshay Nanyang Business School Business::Information technology Queueing Games Tipping Point This paper examines different car-sharing models offered by ride-hailing firms. In the traditional model, customers are served individually. In the sharing-only model, all customers are willing to share the ride with other customers. In the hybrid model, customers may choose either individual or shared service provided by the same fleet. Sharing customers incur a hassle cost. We develop a queueing game-theoretic model to (i) determine the arrival rates that maximizes social welfare and (ii) choose admission fees that maximizes firm profits. First, we discover a tipping point in the hybrid model. When hassle cost decreases to this point, (i) the optimal customer behavior immediately switches from less than 80% sharing customers to 100%, (ii) the optimal arrival rate increases dramatically, and (iii) the rate at which a decreasing hassle cost improves the maximum social welfare significantly increases. Second, when hassle cost is higher than the tipping point, the hybrid model may generate higher social welfare than the other two models. Hence, the firm can improve social welfare by assigning customers to differentiated services even when they are not heterogeneous. Finally, we propose a profit-maximizing admission fee structure in the hybrid model to maximize firm profits and demonstrate its effectiveness. Ministry of Education (MOE) Submitted/Accepted version This work was supported by Singapore Ministry ofEducation Academic Research Fund MOE2017-T1-001-138. 2023-04-17T01:14:39Z 2023-04-17T01:14:39Z 2022 Journal Article Wang, J., Chua, G. A., Sainathan, A. & Vijayendiran, A. (2022). Equilibrium queueing analysis in a ride-hailing service with sharing option. Journal of the Operational Research Society, 1-20. https://dx.doi.org/10.1080/01605682.2022.2155589 0160-5682 https://hdl.handle.net/10356/166198 10.1080/01605682.2022.2155589 2-s2.0-85144257504 1 20 en MOE2017-T1-001-138 Journal of the Operational Research Society © 2022 Operational Research Society. All rights reserved. This paper was published in Journal of the Operational Research Society and is made available with permission of Operational Research Society. application/pdf
institution Nanyang Technological University
building NTU Library
continent Asia
country Singapore
Singapore
content_provider NTU Library
collection DR-NTU
language English
topic Business::Information technology
Queueing Games
Tipping Point
spellingShingle Business::Information technology
Queueing Games
Tipping Point
Wang, Jianfu
Chua, Geoffrey A.
Sainathan, Arvind
Vijayendiran, Akshay
Equilibrium queueing analysis in a ride-hailing service with sharing option
description This paper examines different car-sharing models offered by ride-hailing firms. In the traditional model, customers are served individually. In the sharing-only model, all customers are willing to share the ride with other customers. In the hybrid model, customers may choose either individual or shared service provided by the same fleet. Sharing customers incur a hassle cost. We develop a queueing game-theoretic model to (i) determine the arrival rates that maximizes social welfare and (ii) choose admission fees that maximizes firm profits. First, we discover a tipping point in the hybrid model. When hassle cost decreases to this point, (i) the optimal customer behavior immediately switches from less than 80% sharing customers to 100%, (ii) the optimal arrival rate increases dramatically, and (iii) the rate at which a decreasing hassle cost improves the maximum social welfare significantly increases. Second, when hassle cost is higher than the tipping point, the hybrid model may generate higher social welfare than the other two models. Hence, the firm can improve social welfare by assigning customers to differentiated services even when they are not heterogeneous. Finally, we propose a profit-maximizing admission fee structure in the hybrid model to maximize firm profits and demonstrate its effectiveness.
author2 Nanyang Business School
author_facet Nanyang Business School
Wang, Jianfu
Chua, Geoffrey A.
Sainathan, Arvind
Vijayendiran, Akshay
format Article
author Wang, Jianfu
Chua, Geoffrey A.
Sainathan, Arvind
Vijayendiran, Akshay
author_sort Wang, Jianfu
title Equilibrium queueing analysis in a ride-hailing service with sharing option
title_short Equilibrium queueing analysis in a ride-hailing service with sharing option
title_full Equilibrium queueing analysis in a ride-hailing service with sharing option
title_fullStr Equilibrium queueing analysis in a ride-hailing service with sharing option
title_full_unstemmed Equilibrium queueing analysis in a ride-hailing service with sharing option
title_sort equilibrium queueing analysis in a ride-hailing service with sharing option
publishDate 2023
url https://hdl.handle.net/10356/166198
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