Two-Tier Sharing in Electric Vehicle Service Market

Abstract

Transportation sharing in goods (bike sharing), distinguished from service sharing (ride), has been one of the most active sectors of the sharing economy recently. Such a business model, facilitated by the mobile Internet and cloud computing platforms, seeks supplies in vehicles on demands at matched times and rental locations. The success has attracted more competitors into it, counter-effectively resulted in redundancies in total supplies, reducing social efficiency. In this work, we take electric car sharing as an example to propose a business solution to deal with such a dilemma. Our main idea is to set up a joint venture to provide shared electric cars for different competitors to operate on. These competitors provide their differentiated service for their customers through their own electric mobile Apps, while reducing the infrastructure cost through the joint venture. We study this business model as a two-stage Stackelberg game to analyze the optimal pricing and the sharing scheme of the leader (joint venture) and its followers (car sharing operators). Our model places the sharing of the electric vehicles in two tiers: One among the customers (to reduce the cost of time sharing) and the other among the operators (to reduce the cost of space sharing).