Research Seminar: The Effects of Driver Wage Policies in Ride-Hailing Networks
When matching rider requests with drivers over a spatial network, ride-hailing platforms face two important challenges: (i) there are significant spatial demand imbalances that require some repositioning of drivers; (ii) drivers strategically decide whether to participate in the platform and if so, when and where to reposition.
On April 27, we had the pleasure to have Uta Mohring, Assistant Professor of Services & Operations Management, UZH, discussing how driver wage policies affect drivers' participation and repositioning decisions and the overall efficiency of ride-hailing networks.
The work characterizes how the effectiveness of driver wage policies under decentralized repositioning depends on the interplay of demand imbalances, wage flexibility, and the congestion-sensitivity and spatial relations of travel times. In networks with constant travel times, driver wage policies achieve the centralized performance benchmark. In particular, origin-dependent wage rates are sufficient, whereas more limited wage flexibility yields driver idling. In networks with congestion-sensitive travel times, the platform generally cannot achieve the centralized benchmark, even with full wage flexibility. Overall, the work highlights how key network operational and financial characteristics affect the efficiency loss of decentralized repositioning in ride-hailing networks.
Link tottps://www.business.uzh.ch/en/research/professorships/sandom/team/professor.html