Pricing shared vehicles

Zakharenko, R. (2023) Pricing shared vehicles. Economics of Transportation, 33, 100296. (doi: 10.1016/j.ecotra.2022.100296)

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This paper analyzes profit-maximizing pricing in a model of shared vehicle (SV) market, with particular emphasis on spatial inequality of demand. I show that the best policy assigns a score to every location, and rewards (penalizes) customers for relocating the vehicle to a place with higher (lower) score. Such spatially explicit pricing enables providers to expand the vehicle dropoff “home” area into otherwise unprofitable low-density suburban areas and into for-fee parking zones. A greater geographic coverage has positive spillovers on operations within the initial home area. The empirical part of the paper uses novel microdata on SV trips to develop a strategy to estimate demand parameters, extrapolate them into larger counterfactual home area, evaluate optimal location scores, and predict profit gains from the expansion.

Item Type:Articles
Glasgow Author(s) Enlighten ID:Zakharenko, Dr Roman
Authors: Zakharenko, R.
College/School:College of Social Sciences > Adam Smith Business School > Economics
Journal Name:Economics of Transportation
ISSN (Online):2212-0130
Published Online:06 February 2023

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