Hierarchical Pricing Game for Balancing the Charging of Ride-Hailing Electric Fleets

Due to the ever-increasing popularity of ride-hailing services and the indisputable shift toward alternative fuel vehicles, the intersection of the ride-hailing market and smart electric mobility provides an opportunity to trade different services to achieve societal optimum. In this work, we present a hierarchical, game-based, control mechanism for balancing the simultaneous charging of multiple ride-hailing fleets. The mechanism takes into account sometimes conflicting interests of the ride-hailing drivers, the ride-hailing company management, and the external agents such as power-providing companies or city governments that will play a significant role in charging management in the future. The upper-level control considers charging price incentives and models the interactions between the external agents and ride-hailing companies as a Reverse Stackelberg game (RSG) with a single leader and multiple followers. The lower-level control motivates the revenue-maximizing drivers to follow the company operator’s requests through surge pricing and models the interactions as a single leader, multiple followers Stackelberg game. We provide a pricing mechanism that ensures the existence of a unique Nash equilibrium of the upper-level game that minimizes the external agent’s objective at the same time. We provide theoretical and experimental robustness analysis of the upper-level control with respect to parameters whose values depend on sensitive information that might not be entirely accessible to the external agent. For the lower-level algorithm, we combine the Nash equilibrium of the upper-level game with a quadratic mixed integer optimization problem to find the optimal surge prices. Finally, we illustrate the performance of the control mechanism in a case study based on real taxi data from Shenzhen, China.