Dynamic pricing for free floating car sharing systems
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Date
2023
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Thesis (M.S.) - Bogazici University. Institute for Graduate Studies in Science and Engineering, 2023.
Abstract
In recent years, the importance of sharing platforms has increased as a result of globalisation and networking. As the world has become more globalized, the sharing economy has spread, with people from all corners of the globe embracing collaborative consumption patterns. One of the emerging markets in the sharing economy is car sharing. Car sharing platforms have been studied in the literature as station-based and free- floating. Free-floating Car Sharing (FFCS) model is the most flexible among the car sharing models because customers are free to park vehicles anywhere in the service area. FFCS offers flexibility and convenience to its customers. However, this flexibility can create some problems such as uneven distribution of vehicles between stations, parking challenges and fleet management. Imbalanced distribution of vehicles leads to customer loss and dissatisfaction, which in turn leads to loss of profit for car sharing companies and damages long-term sustainability. In order to create customer loyalty to such a service, it is important that vehicles are available where customers are looking for them. In this thesis, combined vehicle relocation and trip pricing strategy is developed to solve imbalanced vehicle distribution and to increase the profitability of the companies. Mixed integer nonlinear mathematical model is formulated to solve this problem. Computational experiments are performed using both synthetic and real data. Due to the complexity of the model, the proposed model is tested with smallscale instances only. It is observed that by implementing a trip pricing strategy, a profit of $128087.4 per day is achieved, whereas by applying a fixed pricing strategy without any relocation, the system is able to achieve a profit of only $6947.9 per day. The improvement of the system is achieved by increasing the prices and decreasing the reasonable quantity of demand.