Autonomous Vehicles in Ride-Hailing and the Threat of Spatial Inequalities

81 Pages Posted: 24 Jan 2023

See all articles by Francisco Castro

Francisco Castro

University of California, Los Angeles (UCLA) - Anderson School of Management

Jian Gao

University of California, Los Angeles (UCLA) - Anderson School of Management

Sebastien Martin

Northwestern University

Date Written: January 20, 2023

Abstract

This paper studies how the potential introduction of autonomous vehicles (AVs) in a fleet of human drivers (HVs) may impact the quality of service and the equality of access to transportation on ride-hailing platforms. We formulate a game-theoretical queueing model in which a platform aims to maximize its profit while HVs make strategic joining decisions. Our results demonstrate that the introduction of AVs may deteriorate the service level. As the platform incorporates AVs, it may prioritize them, which affects the earnings of HVs and drives them out of the market. We then reveal that the reduction of service level is not homogeneous across areas in a city: while the more profitable high-demand areas, such as downtown areas, may see a high concentration of vehicles and reasonable service levels, remote locations may suffer from a drop in service level. Then, using New York City data, we build a simulation that more closely resembles the operations of a ride-hailing platform. We confirm that our theoretical results from the queueing model still hold, and demonstrate additional effects on service levels that also lead to spatial inequality.

Keywords: Ride-hailing, Autonomous Vehicles, Prioritization, Service Level

Suggested Citation

Castro, Francisco and Gao, Jian and Martin, Sebastien, Autonomous Vehicles in Ride-Hailing and the Threat of Spatial Inequalities (January 20, 2023). Available at SSRN: https://ssrn.com/abstract=4332493 or http://dx.doi.org/10.2139/ssrn.4332493

Francisco Castro

University of California, Los Angeles (UCLA) - Anderson School of Management ( email )

110 Westwood Plaza
Los Angeles, CA 90095-1481
United States
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90095 (Fax)

Jian Gao (Contact Author)

University of California, Los Angeles (UCLA) - Anderson School of Management ( email )

110 Westwood Plaza
Los Angeles, CA 90095-1481
United States

Sebastien Martin

Northwestern University

2001 Sheridan Road
Evanston, IL 60208
United States

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