Regulatory policies to electrify ridesourcing systems

Abstract

This study examines regulatory policies for electrifying a ridesourcing system. To do so, we develop an aggregate modeling framework to analyze a ridesourcing market involving electric vehicles and examine the response of the ridesourcing platform to regulatory policies such as annual permit fees (AP), differential trip-based fees (TB) or differential commission caps (CC). Our modeling exercises and numerical analyses suggest that both AP and TB are effective at achieving a high electrification level, while CC may only electrify the system to a low level. However, CC is the most cost-efficient as it simultaneously benefits drivers and customers, and allows finer intervention to the market. TB is the least cost-efficient as the platform prefers to deliver fewer customers to avoid the trip-based fees and surcharge drivers and customers for higher per-trip profits. Under all policies, the platform’s best response is always to adopt fast chargers and gradually expand the charging network to accommodate the increasing charging needs of its electric vehicle fleet.