Leveraging Customer Flexibility for Car-Sharing Fleet Optimization

Abstract

Car-sharing is a precursor to the emerging class of “mobility services” leveraging modern technology to enable access to car-based mobility without the consumer owning the physical asset. Consequently, it plays an increasingly important role for urban mobility. Two-way station-based systems, where the customer picks up and returns a car at a single designated station, are the most common type of car-sharing solution. While these systems are most common in practice, they have attracted limited research activity from the optimization community. This paper addresses this gap by exploring the potentials of spatial and temporal customer flexibility to achieve better supply-demand alignment. To this end, we assess both the value and the cost of customer flexibility. Using a real-world data set with over 50,000 car-sharing reservations from a midsized German city, we assess the potential benefits of customer flexibility under offline and online optimization. The offline results indicate that temporal flexibility has only very limited potentials for fleet size reductions (4% reduction at four hours’ flexibility). At the same time, spatial flexibility is highly valuable—customer flexibility of 1 kilometer facilitates a fleet reduction of 12%. Furthermore, we find that spatial and temporal flexibility are highly complementary, with 750 meters and 3 hours yielding reduction potentials of almost 20%. The viability of the potentials is confirmed in the online setting with this reduced fleet. To assess customer willingness to provide flexibility, we conducted a basic discrete choice experiment with 1,529 car-sharing customers. We find that several customers are likely to offer flexibility in time or space for relatively little compensation. These estimates are then used as an input to an expanded fleet optimization problem. These results provide novel insights into the benefits and costs of leveraging consumer flexibility in car-sharing schemes. They are of particular relevance for car-sharing service providers and communities that aim to efficiently bridge the gap between individual and public transportation, and to inform urban transportation policy. The online appendix is available at https://doi.org/10.1287/trsc.2017.0813 .