【Academic Seminar】Drivers, Riders and Service Providers: The impact of the sharing economy on Mobility

Title:Drivers, Riders and Service Providers: The impact of the sharing economy on Mobility

Speaker：Prof. Costas Courcoubetis, SUTD

Time and Date：4:00-5:00 pm, Dec 6, 2018

Venue：Boardroom, Dao Yuan Building

Abstract

Ride sharing, the practice of sharing a car such that more than one person travels in the car during a journey, is often heralded as a more sustainable alternative of private transportation. It is widely believed that ride sharing through sharing economy platforms will significantly reduce congestion in populated urban areas.We introduce a model in which individuals may share rides for a certain fee, paid from the rider(s) to the driver through a ride sharing platform. Collective decision making is modelled as an anonymous non-atomic game with a finite set of strategies and payoff functions affine in the individuals' typesthat include their utility for using private transportation and their income. We demonstrate that equilibria in this game may be represented as convex partitions of the two dimensional type space and are unique for almost all parameter combinations. With this model we study how congestion and ownership are affected through the introduction of a ride sharing platform to a population of given characteristics. In particular, we examine whether the potential reduction in congestion widely expected is actually attainable once monetary incentives are introduced that affect both the behaviour of users and the price choices of the platform.

We find that when car costs are low, casual ride sharing (P2P) will dominate the ride sharing market. When car costs are high, professional ride sharing (B2C) will dominate.Focusing on a monopolist revenue maximizing platform we encounter some paradoxical phenomena:For example, increasing car ownership costs as a measure to curb traffic volume might yield counter-intuitive outcomes: an increase in traffic volume, ownership and platform revenue coupled with a decrease in welfare. Comparing a revenue- with a welfare-maximizing platform we find that when cars are cheap the two platform objectives may be aligned. When cars are expensive, a revenue maximizing platform tends to induce an equilibrium with strictly worse welfare and strictly higher congestion compared to the welfare optimum. This suggests that in such a setting, a monopolist platform would need to be regulated more strictly to avoid socially undesirable outcomes.

Joint work with H. Bernhard and S. Benjaafar.

Biography

Prof. Costas A Courcoubetis was born in Athens, Greece and received his Diploma (1977) from the National Technical University of Athens, Greece, in Electrical and Mechanical Engineering, his MS (1980) and PhD (1982) from the University of California, Berkeley, in Electrical Engineering and Computer Science. He was MTS at the Mathematics Research Centre, Bell Laboratories, Professor in the Computer Science Department at the University of Crete, Professor in the Department of Informatics at the Athens University of Economics and Business, and since 2013 Professor in the ESD Pillar, Singapore University of Technology and Design where he heads the Initiative for the Sharing Economy and co-directs the new ST-SUTD Centre for Smart Systems. His current research interests are economics and performance analysis of networks and internet technologies, sharing economy and mobility, regulation policy, smart grids and energy systems, resource sharing and auctions.  Besides leading a large number of research projects in these areas he has also published over 100 papers in scientific journals such as Management Science, Operations Research, Mathematics of Operations Research, Journal on Applied Probability, ToN, IEEE Transactions in Communications, IEEE JSAC, SIAM Journal on Computing, etc. and in conferences such as FOCS, STOC, LICS, INFOCOM. GLOBCOM, ITC, ACM SIGMETRICS. His work has over 14,000 citations according to Google Scholar. He is co-author with Richard Weber of “Pricing Communication Networks: Economics, Technology and Modelling” (Wiley, 2003).