Stackelberg Pricing Game for Ride-Hailing Platforms With Combined Travel Modes

This paper proposes a pricing strategy based on the variable-ratio charging-compensation scheme for a ride-hailing platform with combined travel modes (Express or Carpool) of riders in a general network composed of multiple corridors. We establish a Stackelberg game model with the platform as a leader and the riders as followers to capture the decision-making process of stakeholders, in which the pricing decision is determined by the platform in the upper level taking each rider’s optimal response into account and travel modes are selected by riders independently in the lower level. The built model is a mixed-integer bilevel programming problem, which is difficult to solve due to its inherent hierarchical structure and discrete variables. By means of some mathematical techniques, we transform the bilevel model equivalently into a single-level mixed-integer nonlinear programming problem. Based on the numerical examples and results analysis, we bring some interesting managerial insights into the pricing of ride-hailing platforms, one of which is that booking fees of Express, unit time and distance fees of Express, compensations for Express riders and Express drivers are the core pricing factors to affect travel mode choices of riders.