#187 Incentive Design in Ride Sharing Platforms

Principal Investigator
Alexandre Jacquillat
Start Date
Sept. 1, 2018
End Date
June 30, 2019
Research Type
Grant Type
Grant Program
FAST Act - Mobility National (2016 - 2022)
Grant Cycle
2018 Mobility21 UTC


Ride-sharing platforms have quickly become a widespread phenomena, with significant impacts on urban mobility systems and economies as a whole. At the same time, the ultimate benefits of these platforms might be hindered by mismatches between supply and demand at some hours of the day (temporal mismatch) or in some locations in a city (spatial mismatch). This project explicitly studies the economic aspects of ride-sharing platforms, and particularly the design of incentive systems to align the behaviors of riders and drivers on the platform with broader mobility objectives. Specifically, it will involve three specific investigations. First, it will develop an original mechanism for matching and pricing in ride-sharing systems that explicitly captures the demand heterogeneity in terms of the riders’ preferences over the timing and price of the ride services. In other words, the proposed mechanism allocates available vehicles in priority to time-sensitive riders at a price premium, and offers discounts to other riders willing to incur some delay. Second, it will provide a platform design that enables information sharing with the riders and drivers to enhance transparency over demand levels, wait times and prices across space and time. Third, it will design and optimize rating systems to enhance service levels through the matching of riders and drivers, while maximizing overall system efficiency and minimizing wait times. Ultimately, the results can provide insights on how to render the design of ride-sharing platforms more consistent with users’ preferences, and thereby ultimately more efficient, more fair and more sustainable.    
see attachment    
This project is proposed for two years, starting in July 2018 until June 2020. It will mainly follow the three steps of research proposed in the project description, along the following lines:
– Summer 2018: Finalization the model for Step 1
– Fall 2018: Analytical investigation of the model for Step 1, and characterization of theoretical results and insights from investigation.
– Spring 2019: Write-up of Step 1; Development of model for Step 2
– Summer 2019: Analytical investigation of the model for Step 2, and characterization of the- oretical results and insights from investigation.
– Fall 2019: Write-up of Step 2; Development of model for Step 3
– Spring 2020: Analytical investigation of the model for Step 3, and characterization of theo- retical results and insights from investigation. Write-up of Step 3

In addition, we will engage regularly with other research teams on campus and in the fields of operations research, information systems, transportation science and mechanism design. The research team will disseminate the results and findings at several conferences per year, starting Fall 2018. Last, the team is planning to organize a conference around issues of shared urban mobility in 2019, as an outlet for outreach and feedback.    
Deployment Plan
This project will be led by Vibhanshu Abhishek, Assistant Professor of Information Systems and Alexandre Jacquillat, Assistant Professor of Operations Research and Public Policy. Professor Abhishek has experience with the design of online on-demand platforms and quantitative models of online customer behaviors. Professor Jacquillat has experience with Operations Research methods for transportation systems. The funding from this grant will support a postdoctoral associate, Dr Mustafa Dogan, for the establishment of the research. Dr Dogan has experience on applied economic theory, particularly on the areas of incentive design and information economics. The team will work together through the development of analytical models, the analysis of equilibria, and the discussion of the results’ implications for policy and practice. The funding will also support conference travel to disseminate results and interact with experts and collaborators or funding sources in this field. Computing expenses are also budgeted to support the various research and development efforts.

This project will be among the first collaborations between Professors Abhishek and Jacquillat, and lay out the foundation for a broader initiative on shared urban mobility, bringing together CMU researchers from the fields of operations research, information systems, and transportation engi- neering. It will form the basis for local and federal funding and industrial partnerships. Potential funding sources include local agencies (e.g., the City of Pittsburgh, the Pennsylvania Department of Transportation) and public agencies (the Department of Energy, Department of Transportation, National Science Foundation, etc.). This research program would complement ongoing investiga- tions of pricing mechanisms by focusing on the interactions between ride-sharing operations, online platform design, riders’ and drivers’ behaviors, and urban mobility. This project would enable the exploration of this new, but fast-growing field, which would then lend itself to research endeavors around the development of decision-making models of ride-sharing business decisions for profit max- imization and of public policy incentives for leveraging the growth in ride-sharing to promote the development of efficient, fair and sustainable ride-sharing systems for urban transportation.

Through these research activities, we plan to create and sustain partnerships with public and private organizations involved in urban mobility ecosystems locally and nationally. We have es- tablished ongoing relationships with several companies such as Turo (a peer-to-peer car-sharing platform), Ola (a ride-hailing platform based in India), and Go-Jek (a ride-sharing service in In- donesia), and aim to expand this footprint in the public and the private sector. Ultimately, we aim to leverage this project for outreach. In particular, we plan to organize a conference at the intersection of academia and industry on issues related to shared urban mobility, and to dedicate a session to issues related to pricing mechanisms in ride-sharing systems building upon the results and insights from this project.    
Expected Accomplishments and Metrics
To contribute to the growing literature on sharing economies, the major results and analysis will be organized to be published in top-tier refereed journals, such as Management Science. The series of this research work will also be presented in conferences, e.g., the INFORMS annual conference, the IISE annual conference, etc., in order to disseminate results and interact with experts and collaborators or funding sources in the related fields. Since the questions we study as well as the methods we adapt are closely related to subfields of Economics such as mechanism design and information economics, we also plan to present our work in Economics related conferences. The research team also expects to develop research partnerships with the leading ride-sharing platforms in the United States and abroad (e.g., Uber, Lyft, Ola, Go-Jek) to guide this project, receive feedback, and potentially implement different mechanisms in the field.    

Individuals Involved

Email Name Affiliation Role Position
vibs@andrew.cmu.edu Abhishek, Vibhanshu Carnegie Mellon Heinz College Co-PI Faculty - Untenured, Tenure Track
ajacquil@andrew.cmu.edu Jacquillat, Alexandre Carnegie Mellon Heinz College PI Other


Amount of UTC Funds Awarded
Total Project Budget (from all funding sources)


Type Name Uploaded
Data Management Plan Data_Management_Plan_Iba9wHl.pdf June 15, 2018, 4:13 a.m.
Publication Abhishek_Dogan_Jacquillat_main_NONBLINDED.pdf March 5, 2019, 3:41 p.m.
Presentation Abhishek_Dogan_Jacquillat_main_NONBLINDED_imVgK6e.pdf Sept. 19, 2018, 12:57 p.m.
Progress Report 187_Progress_Report_2018-09-30 Sept. 29, 2018, 7:13 a.m.
Presentation Strategic Timing and Pricing in On-demand Platforms March 5, 2019, 3:41 p.m.
Progress Report 187_Progress_Report_2019-03-30 March 5, 2019, 3:41 p.m.
Progress Report 187_Progress_Report_2019-06-30 June 3, 2019, 10 a.m.
Final Report 187_-_Final_Report.pdf July 16, 2019, 4:56 a.m.

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