Dynamic Pricing for User-Based Rebalancing in Free-Floating Vehicle Sharing

A Real-World Case

Conference paper (2020)

Authors

F. Schulte Transport Engineering and Logistics - Mechanical, Maritime and Materials Engineering
Kevin Tierney Bielefeld University
H. Polinder Transport Engineering and Logistics - Mechanical, Maritime and Materials Engineering
R.R. Negenborn Transport Engineering and Logistics - Mechanical, Maritime and Materials Engineering
Research Group
Transport Engineering and Logistics (Mechanical, Maritime and Materials Engineering) (TU Delft)
Copyright: © 2020 Nout Neijmeijer, F. Schulte, Kevin Tierney, H. Polinder, R.R. Negenborn
DOI: https://doi.org/10.1007/978-3-030-59747-4_29
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Published Date

2020

Language

English

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Faculty

Mechanical, Maritime and Materials Engineering

Department

Marine and Transport Technology

Research Group

Transport Engineering and Logistics

Abstract

Dynamic pricing can be used for better fleet distribution in free-floating vehicle sharing (FFVS), and thus increase utilization and revenue for the provider by reducing supply-demand asymmetry. Supply-demand asymmetry refers to the existence of an undersupply of vehicles at some locations at the same time as underutilization of vehicles at other locations. We propose to use dynamic pricing as an instrument to incentivize users to rebalance these vehicles from low demand locations to high demand locations. Despite significant research in rebalancing vehicle sharing, the literature so far lacks experimental results on dynamic pricing in free-floating vehicle sharing. We propose to use an algorithm that minimizes the differences in the idle time of vehicles. The algorithm is tested in a real-life experiment that was conducted in cooperation with an FFVS provider. The results of the experiment are not statistically significant, but they clearly indicate that even slight differences in pricing and a simple algorithm can already influence user-behavior to counter supply-demand asymmetry. Improving the existing algorithm with more experimental research is advised to further uncover the potential of this strategy.

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