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Pricing shared vehicles

Roman Zakharenko

Economics of Transportation, 2023, vol. 33, issue C

Abstract: This paper analyzes profit-maximizing pricing in a model of shared vehicle (SV) market, with particular emphasis on spatial inequality of demand. I show that the best policy assigns a score to every location, and rewards (penalizes) customers for relocating the vehicle to a place with higher (lower) score. Such spatially explicit pricing enables providers to expand the vehicle dropoff “home” area into otherwise unprofitable low-density suburban areas and into for-fee parking zones. A greater geographic coverage has positive spillovers on operations within the initial home area. The empirical part of the paper uses novel microdata on SV trips to develop a strategy to estimate demand parameters, extrapolate them into larger counterfactual home area, evaluate optimal location scores, and predict profit gains from the expansion.

Keywords: Shared vehicle; Home area; Spatial pricing; Trip demand (search for similar items in EconPapers)
JEL-codes: C53 L91 R41 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecotra:v:33:y:2023:i:c:s2212012222000478

DOI: 10.1016/j.ecotra.2022.100296

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