research-article

Dynamic pricing in ridesharing platforms

Authors:

Siddhartha Banerjee,

Ramesh Johari,

Carlos RiquelmeAuthors Info & Claims

ACM SIGecom Exchanges, Volume 15, Issue 1

Pages 65 - 70

https://doi.org/10.1145/2994501.2994505

Published: 06 September 2016 Publication History

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Abstract

We study dynamic pricing policies for ridesharing platforms such as Lyft and Uber. On one hand these platforms are two-sided: this requires economic models that capture the incentives of both drivers and passengers. On the other hand, these platforms support high temporal-resolution for data collection and pricing: this requires stochastic models that capture the dynamics of drivers and passengers in the system.

We summarize our main results from [Banerjee et al. 2015], in which we study the role of dynamic pricing in ridesharing platforms using a queueing-theoretic economic model. We build a model of two-sided ridesharing platforms that captures both the stochastic dynamics of the marketplace and the strategic decisions of drivers, passengers and the platform. We show how our model can help explain the success of dynamic pricing in practice: in particular, we argue that the benefit of dynamic pricing over static pricing is not in the optimal performance, but rather, in the robustness of its performance to uncertainty in system parameters.

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Banerjee, S., Johari, R., and Riquelme, C. 2015. Pricing in ride-sharing platforms: A queueing-theoretic approach. Available at SSRN 2568258.

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Cited By

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Koyama YNakamura APhung-Duc T(2024)Sojourn Time Analysis of a Single-Server Queue with Single- and Batch-Service CustomersMathematics10.3390/math1218282012:18(2820)Online publication date: 11-Sep-2024
https://doi.org/10.3390/math12182820
Shi P(2024)The Welfare Effects of Selling Leads in a Two-Sided MarketplaceSSRN Electronic Journal10.2139/ssrn.4727198Online publication date: 2024
https://doi.org/10.2139/ssrn.4727198
Cashore JFrazier PTardos É(2024)Dynamic Pricing Provides Robust Equilibria in Stochastic Ridesharing NetworksMathematics of Operations Research10.1287/moor.2022.016349:3(1647-1677)Online publication date: 1-Aug-2024
https://dl.acm.org/doi/10.1287/moor.2022.0163
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Index Terms

Dynamic pricing in ridesharing platforms
1. Applied computing
  1. Law, social and behavioral sciences
    1. Economics

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Information & Contributors

Information

Published In

ACM SIGecom Exchanges Volume 15, Issue 1

July 2016

87 pages

EISSN:1551-9031

DOI:10.1145/2994501

Editor:
Shaddin Dughmi
University of Southern California

Issue’s Table of Contents

Publisher

Association for Computing Machinery

New York, NY, United States

Publication History

Published: 06 September 2016

Published in SIGECOM Volume 15, Issue 1

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Cited By

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Koyama YNakamura APhung-Duc T(2024)Sojourn Time Analysis of a Single-Server Queue with Single- and Batch-Service CustomersMathematics10.3390/math1218282012:18(2820)Online publication date: 11-Sep-2024
https://doi.org/10.3390/math12182820
Shi P(2024)The Welfare Effects of Selling Leads in a Two-Sided MarketplaceSSRN Electronic Journal10.2139/ssrn.4727198Online publication date: 2024
https://doi.org/10.2139/ssrn.4727198
Cashore JFrazier PTardos É(2024)Dynamic Pricing Provides Robust Equilibria in Stochastic Ridesharing NetworksMathematics of Operations Research10.1287/moor.2022.016349:3(1647-1677)Online publication date: 1-Aug-2024
https://dl.acm.org/doi/10.1287/moor.2022.0163
Min XChi WHu XYe Q(2024)Set a Goal for Yourself? A Model and Field Experiment With Gig WorkersProduction and Operations Management10.1177/1059147823122492733:1(205-224)Online publication date: 8-Feb-2024
https://doi.org/10.1177/10591478231224927
Xu PChua TNgo CKa-Wei Lee RKumar RLauw H(2024)Tight Competitive and Variance Analyses of Matching Policies in Gig PlatformsProceedings of the ACM Web Conference 202410.1145/3589334.3645335(5-13)Online publication date: 13-May-2024
https://dl.acm.org/doi/10.1145/3589334.3645335
Cheng XMamalis TBose SVarshney L(2024)On Carsharing Platforms With Electric Vehicles as Energy Service ProvidersIEEE Transactions on Intelligent Transportation Systems10.1109/TITS.2024.338670825:7(8158-8170)Online publication date: 1-Jul-2024
https://dl.acm.org/doi/10.1109/TITS.2024.3386708
Chen XDi X(2024)A network equilibrium model for integrated shared mobility services with ride-poolingTransportation Research Part C: Emerging Technologies10.1016/j.trc.2024.104837167(104837)Online publication date: Oct-2024
https://doi.org/10.1016/j.trc.2024.104837
Huang H(2023)Ridesharing Price Prediction: Exploring the strategies of Dynamic PricingHighlights in Business, Economics and Management10.54097/hbem.v10i.796310(106-110)Online publication date: 9-May-2023
https://doi.org/10.54097/hbem.v10i.7963
Zhang XVarakantham PJiang HWilliams BChen YNeville J(2023)Future aware pricing and matching for sustainable on-demand ride poolingProceedings of the Thirty-Seventh AAAI Conference on Artificial Intelligence and Thirty-Fifth Conference on Innovative Applications of Artificial Intelligence and Thirteenth Symposium on Educational Advances in Artificial Intelligence10.1609/aaai.v37i12.26710(14628-14636)Online publication date: 7-Feb-2023
https://dl.acm.org/doi/10.1609/aaai.v37i12.26710
Varma SBumpensanti PMaguluri SWang H(2023)Dynamic Pricing and Matching for Two-Sided QueuesOperations Research10.1287/opre.2021.223371:1(83-100)Online publication date: 1-Jan-2023
https://dl.acm.org/doi/10.1287/opre.2021.2233
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