A queueing model of dynamic pricing and dispatch control for ride-hailing systems incorporating travel times

A system manager makes dynamic pricing and dispatch control decisions in a queueing network model motivated by ride hailing applications. A novel feature of the model is that it incorporates travel times. Unfortunately, this renders the exact analysis of the problem intractable. Therefore, we study...

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Bibliographic Details
Published inQueueing systems Vol. 106; no. 1-2; pp. 1 - 66
Main Authors Alwan, Amir A., Ata, Baris, Zhou, Yuwei
Format Journal Article
LanguageEnglish
Published New York Springer US 01.02.2024
Springer Nature B.V
Subjects
Business and Management
Computer Communication Networks
Control
Customer services
Operations Research/Decision Theory
Prices
Pricing
Probability Theory and Stochastic Processes
Profits
Queuing theory
Supply Chain Management
Systems Theory
Travel time
Workloads
Ride-hailing
Matching
60K30
93E20
90B15
93E03
60J60
Dynamic pricing
Stochastic control
Diffusion approximations
Heavy traffic analysis
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Summary:A system manager makes dynamic pricing and dispatch control decisions in a queueing network model motivated by ride hailing applications. A novel feature of the model is that it incorporates travel times. Unfortunately, this renders the exact analysis of the problem intractable. Therefore, we study this problem in the heavy traffic regime. Under the assumptions of complete resource pooling and common travel time and routing distributions, we solve the problem in closed form by analyzing the corresponding Bellman equation. Using this solution, we propose a policy for the queueing system and illustrate its effectiveness in a simulation study.
Bibliography:ObjectType-Article-1
SourceType-Scholarly Journals-1
ObjectType-Feature-2
content type line 14
ISSN:0257-0130
1572-9443
DOI:10.1007/s11134-023-09901-y