Spatial Pricing of Ride-sourcing Services in a CongestedTransportation Network

Abstract

We investigate the impacts of spatial pricing for ride-sourcing services in a Stackelberg framework considering traffic congestion. In the lower level, we use combined distribution and assignment approaches to explicitly capture the interactions between drivers' relocation, riders' mode choice, and all travelers' routing decisions. In the upper level, a single transportation network company (TNC) determines spatial pricing strategies to minimize imbalance in a two-sided market. We show the existence of the optimal pricing strategies for locational imbalance minimization, and propose effective algorithms with reliable convergence properties. Furthermore, the optimal pricing is unique and can be solved in a convex reformulation when matching time can be ignored. We conduct numerical experiments on different scales of transportation networks with different TNC objectives to generate policy insights on how spatial pricing could impact transportation systems.