Operations Research, Systems Engineering and Industrial Engineering Commons^™

Integrated Reward Scheme And Surge Pricing In A Ride-Sourcing Market, Hai Yang, Chaoyi Shao, Hai Wang, Jieping Ye

Research Collection School Of Computing and Information Systems

Surge pricing is commonly used in on-demand ride-sourcing platforms (e.g., Uber, Lyft and Didi) to dynamically balance demand and supply. However, since the price for ride service cannot be unlimited, there is usually a reasonable or legitimate range of prices in practice. Such a constrained surge pricing strategy fails to balance demand and supply in certain cases, e.g., even adopting the maximum allowed price cannot reduce the demand to an affordable level during peak hours. In addition, the practice of surge pricing is controversial and has stimulated long debate regarding its pros and cons. To address the limitation of current …