A Proportional Pricing Mechanism for Ridesharing Services with Meeting Points

Lucia Cipolina-Kun, Vahid Yazdanpanah, Sebastian Stein, Enrico H. Gerding

Abstract: Ridesharing is a promising approach for reducing congestion and pollution, and many variants have been studied in the literature over the past decades. In this paper, we consider a novel setting where individuals walk to a common pick-up point and ride together to a single drop-off point from where they walk to their final destination. This setting requires finding the optimal composition of riders and pick-up and drop-off meeting points, as well as an equitable distribution of the costs whereby riders are incentivised to participate. Based on game-theoretic principles, we propose a methodology to determine the optimal pick-up and drop-off points, together with a cost allocation method that is equitable in the sense that it ensures proportionality for sharing the costs, i.e., those who walk more should pay less. We present a formal evaluation of our cost allocation method and empirical evaluation against the Shapley value using real-world and simulated data. Our results show that our approach is computationally more tractable than the Shapley value, as it is linear in time while guaranteeing individual rationality under certain conditions.