Auction-Based Permit Allocation and Sharing System (A-PASS) for Travel Demand Management

Abstract

This paper proposes a novel quantity-based demand management system that aims to promote ridesharing. The system sells a time-dependent permit to access a road facility (conceptualized as a bottleneck) by auction but encourages commuters to share permits with each other. The commuters may be assigned one of three roles: solo driver, ridesharing driver, or rider. At the core of this auction-based permit allocation and sharing system (A-PASS) is a trilateral matching problem (TMP) that matches permits, drivers, and riders. Formulated as an integer program, TMP is first shown to be tightly bounded by its linear relaxation. A pricing policy based on the classical Vickrey–Clarke–Groves (VCG) mechanism is then devised to determine the payment of each commuter. We prove that, under the VCG policy, different commuters pay exactly the same price as long as their role and access time are the same. Importantly, by controlling the number of shared rides, any deficit that may arise from the VCG policy can be eliminated. This may be achieved with a relatively small loss to system efficiency, thanks to the revenue generated from selling permits. Results of a numerical experiment suggest A-PASS strongly promotes ridesharing. As sharing increases, all stakeholders are better off: the ridesharing platform receives greater profits, the commuters enjoy higher utility, and society benefits from more efficient utilization of the road infrastructure.