Competitive pricing for ride-sourcing platforms with MARL

Abstract

With the advancement of autonomous driving, the competition between shared autonomous vehicles (SAVs) and the existing human-driven vehicles (HVs) ride-sourcing platforms has emerged as a prominent research area within the fields of transportation and management. Solving the pricing problem, considering the competition between HV and SAV platforms, is critical for the platform’s operation. The competitive pricing problem is hard to solve since it is a partially observable Markov decision process (POMDP), that is, only the strategies of other platforms (such as price and wage) are observable, while their states are unobservable. It is also a multivariable sequential problem pricing since spatial-temporal pricing varies with region and time. To tackle this complex problem, this paper implements the multi-agent reinforcement learning (MARL) approach of multi-agent deep deterministic policy gradient (MADDPG) to an mesoscopic simulation system. The simulation replicates the intricate dynamics within a competitive environment where SAV and HV platforms coexist. MADDPG effectively resolves the competitive pricing issue using data derived from simulation. The findings indicate that the SAV platform secures greater profits with a smaller fleet, as it eliminates the need to compensate drivers. Meanwhile, for the same reason, even with fewer vehicles, the SAV platform can set lower prices to attract more passengers and thereby generate higher profits. We further evaluate the efficacy of dynamic pricing versus spatial-temporal pricing and discover that spatial-temporal pricing yields greater profits.