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A truthful subsidy scheme for a peer-to-peer ridesharing market with incomplete information

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  • Tafreshian, Amirmahdi
  • Masoud, Neda

Abstract

Traffic congestion during peak periods has become a serious issue around the globe, partly due to the high number of single-occupancy commuter trips. Peer-to-peer (P2P) ridesharing platforms can present a suitable alternative for serving commuter trips. However, they face a major obstacle that prevents them from being a viable mode of transportation in practice: ridesharing users often provide tight time windows, which ultimately leads to a low matching rate. This study addresses this issue by introducing a subsidy scheme that allocates incentives to encourage a few carefully selected set of travelers to change their desired departure or arrival times, and thereby form successful matches. In order to implement this scheme for a ridesharing platform in the existence of private information, we propose an auction-based mechanism that guarantees truthfulness, individual rationality, budget-balance, and computational efficiency. Using numerical experiments, we show the merits of the proposed subsidy scheme when compared to its no-deficit variant as well as the conventional VCG mechanism.

Suggested Citation

  • Tafreshian, Amirmahdi & Masoud, Neda, 2022. "A truthful subsidy scheme for a peer-to-peer ridesharing market with incomplete information," Transportation Research Part B: Methodological, Elsevier, vol. 162(C), pages 130-161.
    • Handle: RePEc:eee:transb:v:162:y:2022:i:c:p:130-161
    DOI: 10.1016/j.trb.2022.05.010
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    References listed on IDEAS

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