Ridesourcing systems: A framework and review

Abstract

Abstract With the rapid development and popularization of mobile and wireless communication technologies, ridesourcing companies have been able to leverage internet-based platforms to operate e-hailing services in many cities around the world. These companies connect passengers and drivers in real time and are disruptively changing the transportation industry. As pioneers in a general sharing economy context, ridesourcing shared transportation platforms consist of a typical two-sided market. On the demand side, passengers are sensitive to the price and quality of the service. On the supply side, drivers, as freelancers, make working decisions flexibly based on their income from the platform and many other factors. Diverse variables and factors in the system are strongly endogenous and interactively dependent. How to design and operate ridesourcing systems is vital—and challenging—for all stakeholders: passengers/users, drivers/service providers, platforms, policy makers, and the general public. In this paper, we propose a general framework to describe ridesourcing systems. This framework can aid understanding of the interactions between endogenous and exogenous variables, their changes in response to platforms’ operational strategies and decisions, multiple system objectives, and market equilibria in a dynamic manner. Under the proposed general framework, we summarize important research problems and the corresponding methodologies that have been and are being developed and implemented to address these problems. We conduct a comprehensive review of the literature on these problems in different areas from diverse perspectives, including (1) demand and pricing, (2) supply and incentives, (3) platform operations, and (4) competition, impacts, and regulations. The proposed framework and the review also suggest many avenues requiring future research.