Dynamic Pricing and Matching in Ride-Hailing Platforms

Naval Research Logistics, Forthcoming

36 Pages Posted: 30 Oct 2018 Last revised: 13 Nov 2019

See all articles by Chiwei Yan

Chiwei Yan

Uber Technologies, Inc.

Helin Zhu

Uber Technologies, Inc.

Nikita Korolko

Uber Technologies, Inc.

Dawn Woodard

Uber Technologies, Inc.

Date Written: October 1, 2018

Abstract

Ride-hailing platforms such as Uber, Lyft and DiDi have achieved explosive growth and reshaped urban transportation. The theory and technologies behind these platforms have become one of the most active research topics in the fields of economics, operations research, computer science, and transportation engineering. In particular, advanced matching and dynamic pricing algorithms -- the two key levers in ride-hailing -- have received tremendous attention from the research community and are continuously being designed and implemented at industrial scales by ride-hailing platforms. We provide a review of matching and dynamic pricing techniques in ride-hailing, and show that they are critical for providing an experience with low waiting time for both riders and drivers. Then we link the two levers together by studying a pool-matching mechanism called dynamic waiting that varies rider waiting and walking before dispatch, which is inspired by a recent carpooling product Express Pool from Uber. We show using data from Uber that by jointly optimizing dynamic pricing and dynamic waiting, price variability can be mitigated, while increasing capacity utilization, trip throughput, and welfare. We also highlight several key practical challenges and directions of future research from a practitioner's perspective.

Keywords: Ride-Hailing, Ride-Sharing, Matching, Dynamic Pricing, Dynamic Waiting

Suggested Citation

Yan, Chiwei and Zhu, Helin and Korolko, Nikita and Woodard, Dawn, Dynamic Pricing and Matching in Ride-Hailing Platforms (October 1, 2018). Naval Research Logistics, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3258234 or http://dx.doi.org/10.2139/ssrn.3258234

Chiwei Yan (Contact Author)

Uber Technologies, Inc. ( email )

San Francisco, CA 94158
United States

HOME PAGE: http://web.mit.edu/chiwei/www

Helin Zhu

Uber Technologies, Inc. ( email )

San Francisco, CA 94158

Nikita Korolko

Uber Technologies, Inc. ( email )

San Francisco, CA 94158

Dawn Woodard

Uber Technologies, Inc. ( email )

San Francisco, CA 94158

Register to save articles to
your library

Register

Paper statistics

Downloads
1,300
Abstract Views
5,205
rank
14,916
PlumX Metrics