 Managing on-demand ridesharing operations: Optimal pricing decisions for a ridesharing platformZhenning Dong and Mingming Leng International Journal of Production Economics, 2021, vol. 232, issue C Abstract: We investigate an on-demand ridesharing system consisting of a ridesharing platform, multiple drivers, and multiple passengers. We begin by analyzing a choice problem for a passenger who chooses either a ridesharing or taxi service and also studying a choice problem for a driver who decides on whether or not to serve. Then, we obtain the ridesharing platform’s optimal service price charged to passengers and its optimal wage paid to drivers. We perform sensitivity analysis to draw a number of managerial implications. An increase in the number of potential passengers (drivers) usually results in an increase (a decrease) in both the price and wage. We also find that the platform is better off when both the number of passengers and the number of drivers are higher, and an increase in the passengers’ mental costs for the taxi service can help increase the platform’s profit. Moreover, the dynamic pricing strategy can not only improve the platform’s profit but also generate larger surpluses to passengers and drivers. Keywords: Optimization; Decision analysis; Ridesharing operations (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:232:y:2021:i:c:s0925527320303108 DOI: 10.1016/j.ijpe.2020.107958 Access Statistics for this article International Journal of Production Economics is currently edited by Stefan Minner More articles in International Journal of Production Economics from Elsevier |
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