TY - JOUR
T1 - Customer behavioural modelling of order cancellation in coupled ride-sourcing and taxi markets
AU - Wang, Xiaolei
AU - Liu, Wei
AU - Yang, Hai
AU - Wang, Dan
AU - Ye, Jieping
N1 - Funding Information:
The work described in this paper is supported by grants from the aN tional aN tural Science oF undation of Chi na under Project oN .71401102 , oN . 71531011 and oN . 71890973, a grant from Hong oK ng’s Research raG nts Council under project oN .HSUK T16222916 , and a grant from SN C/F RGC joint research scheme under proej ct oN . HN SUK T627/18 . The authors are grateful to Didi Chuxing (http://www.xiaojukeij .com) for providing us the analysis data.
Funding Information:
The work described in this paper is supported by grants from the National Natural Science Foundation of China under Project No.71401102, No. 71531011 and No. 71890973, a grant from Hong Kong's Research Grants Council under project No.HKUST16222916, and a grant from NSFC/RGC joint research scheme under project No. N_HKUST627/18. The authors are grateful to Didi Chuxing (http://www.xiaojukeji.com) for providing us the analysis data.
Publisher Copyright:
10.1016/j.trpro.2019.05.044
PY - 2019/7
Y1 - 2019/7
N2 - Today massive on-demand ride requests are dispatched every hour on ride-sourcing platforms, but an unneglectable amount of confirmed orders is later cancelled by customers. Customers' order cancellation not only wastes drivers' efforts, but also lowers the availability of supplies on the ride-sourcing platform. Based on a two-month hourly-average dataset provided by Didi Chuxing, this paper makes the first attempt to look into customers' cancellation behaviours of the confirmed-orders. The customers' confirmed-order cancellation rate (COCR) is observed to be significantly and negatively correlated to the customers' waiting time for pick-up time. We regard such counter-intuitive phenomena as an outcome of customers' mode switch upon meeting vacant taxis while in waiting for ride-sourcing vehicles. The cancellation rate is thus characterized as a function of customers' average waiting time for ride-sourcing vehicles and cruising taxis, the platform's penalty strategy for cancellation of confirmed-orders, and the customers' own characteristics (i.e., value of time, psychological cost of order cancellation). As both the customers' waiting times for ride-sourcing vehicles and cruising taxis are endogenously determined by the demand and supply of ride-sourcing and taxi markets respectively, a system of nonlinear equations is proposed to depict the complex interactions between the two markets at equilibrium while considering customers' order cancellation behaviour under a given penalty and compensation rule. With the proposed model, we theoretically establish the existence of the equilibrium under mild conditions, and examine the optimal pricing and penalty/compensation strategies that respectively maximize the platform's profit and social welfare respectively. Numerical examples are presented to demonstrate the distinct optimal pricing and penalty/compensation strategies for different objectives and examine the various impacts of the social credibility.
AB - Today massive on-demand ride requests are dispatched every hour on ride-sourcing platforms, but an unneglectable amount of confirmed orders is later cancelled by customers. Customers' order cancellation not only wastes drivers' efforts, but also lowers the availability of supplies on the ride-sourcing platform. Based on a two-month hourly-average dataset provided by Didi Chuxing, this paper makes the first attempt to look into customers' cancellation behaviours of the confirmed-orders. The customers' confirmed-order cancellation rate (COCR) is observed to be significantly and negatively correlated to the customers' waiting time for pick-up time. We regard such counter-intuitive phenomena as an outcome of customers' mode switch upon meeting vacant taxis while in waiting for ride-sourcing vehicles. The cancellation rate is thus characterized as a function of customers' average waiting time for ride-sourcing vehicles and cruising taxis, the platform's penalty strategy for cancellation of confirmed-orders, and the customers' own characteristics (i.e., value of time, psychological cost of order cancellation). As both the customers' waiting times for ride-sourcing vehicles and cruising taxis are endogenously determined by the demand and supply of ride-sourcing and taxi markets respectively, a system of nonlinear equations is proposed to depict the complex interactions between the two markets at equilibrium while considering customers' order cancellation behaviour under a given penalty and compensation rule. With the proposed model, we theoretically establish the existence of the equilibrium under mild conditions, and examine the optimal pricing and penalty/compensation strategies that respectively maximize the platform's profit and social welfare respectively. Numerical examples are presented to demonstrate the distinct optimal pricing and penalty/compensation strategies for different objectives and examine the various impacts of the social credibility.
KW - Equilibrium
KW - Order cancellation
KW - Ride-sourcing
KW - Taxi
UR - http://www.scopus.com/inward/record.url?scp=85074946342&partnerID=8YFLogxK
U2 - 10.1016/j.trpro.2019.05.044
DO - 10.1016/j.trpro.2019.05.044
M3 - Conference article
AN - SCOPUS:85074946342
SN - 2352-1457
VL - 38
SP - 853
EP - 873
JO - Transportation Research Procedia
JF - Transportation Research Procedia
T2 - 23rd International Symposium on Transportation and Traffic Theory, ISTTT 2019
Y2 - 24 July 2018 through 26 July 2018
ER -