Integrating dial-a-ride with transportation network companies for cost efficiency: A Maryland case study

Abstract

Dial-a-ride (DAR) is a shared-ride service that provides mobility to transportation-disadvantaged individuals who are unable to use public transit. While most DAR studies focus on optimizing operations, our research explores the feasibility and benefits of outsourcing outlier trips to transportation network companies (TNCs) to minimize the combined service delivery cost. To achieve this goal, we formulate a multi-vehicle DAR problem (DARP) with trip outsourcing to TNCs, which can be solved optimally for small scale instances. To solve larger instances, we propose a two-stage solution framework to improve DAR routes from commercially available software. Firstly, we develop an integer programming model to re-optimize individual routes with trip outsourcing. Secondly, we design a multi-vehicle heuristic that considers reinserting trips initially designated for outsourcing back into the DAR fleet, as well as reinsertion and exchange of remaining trips among routes. We apply the approach to a medium-sized DAR operator in Maryland and achieve cost reductions of 7%-13% depending on the TNC volume discount negotiated by the DAR company.