The Implications of Drivers’ Ride Acceptance Decisions on the Operations of Ride-Sourcing Platforms

22 Pages Posted: 15 Mar 2024

See all articles by Peyman Ashkrof

Peyman Ashkrof

affiliation not provided to SSRN

Farnoud Ghasemi

affiliation not provided to SSRN

Rafał Kucharski

Jagiellonian University in Krakow

Gonçalo Homem de Almeida Correia

Delft University of Technology

Oded Cats

Delft University of Technology

Bart van Arem

Delft University of Technology

Abstract

As a two-sided digital platform, ride-sourcing has disruptively penetrated the mobility market. Ride-sourcing companies provide door-to-door transport services by connecting passengers with independent service suppliers labelled as “driver-partners”. Once a passenger submits a ride request, the platform attempts to match the request with a nearby available driver. Drivers have the freedom to accept or decline ride requests. The consequences of this decision, which is made at the operation level, have remained largely unknown in the literature. Using agent-based simulation modelling, we study the impacts of drivers’ ride acceptance behaviour, estimated from unique empirical data, on the ride-sourcing system where the platform applies regular and surge pricing strategies, and riders may revoke their requests and reject the received offers. Furthermore, we delve into the implications of various supply-demand intensities, a centralised fleet (i.e., mandatory acceptance on each ride request) versus a decentralised fleet (i.e., ride acceptance decision by each driver), ride acceptance rates, and surge pricing settings. We find that the ride acceptance decision of ride-sourcing drivers has far-reaching consequences for system performance in terms of passengers’ waiting time, driver’s revenue, operating costs, and profit, all of which are highly dependent on the ratio between demand and supply. As the system undergoes a transition from undersupplied (i.e., real-time demand locally exceeds available drivers) to balanced and then oversupplied state (i.e., more available drivers than real-time demand), ride acceptance decisions result in higher income inequality. A high acceptance rate among drivers may lead to more rides, but it does not necessarily increase their profit. Surge pricing is found to be asymmetrically in favour of all the parties despite adverse effects on the demand side due to higher trip fare. This study offers insights into both the aggregated and disaggregated levels of ride-sourcing system operations and outlines a series of transport policy and practice implications in cities that offer such ride-sourcing systems.

Keywords: Ride-sourcing, Ride-hailing, agent-based simulation, driver's behaviour, surge pricing, ride acceptance

Suggested Citation

Ashkrof, Peyman and Ghasemi, Farnoud and Kucharski, Rafał and Correia, Gonçalo Homem de Almeida and Cats, Oded and van Arem, Bart, The Implications of Drivers’ Ride Acceptance Decisions on the Operations of Ride-Sourcing Platforms. Available at SSRN: https://ssrn.com/abstract=4760834 or http://dx.doi.org/10.2139/ssrn.4760834

Peyman Ashkrof (Contact Author)

affiliation not provided to SSRN ( email )

No Address Available

Farnoud Ghasemi

affiliation not provided to SSRN ( email )

No Address Available

Rafał Kucharski

Jagiellonian University in Krakow ( email )

Collegium Novum
ul. Gołębia 24
Kraków, 31-007
Poland

Gonçalo Homem de Almeida Correia

Delft University of Technology ( email )

Oded Cats

Delft University of Technology ( email )

Stevinweg 1
Stevinweg 1
Delft, 2628 CN
Netherlands

Bart Van Arem

Delft University of Technology ( email )

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