Analysis of ride-sharing with service time and detour guarantees

Abstract This paper explores whether upper bound guarantees to detour distances can be introduced in ride sharing services. By ride sharing we mean taxi ride aggregation services such as Uber-Pool. The paper develops an analytical model that for a given demand relates the guarantee levels to (i) the percent of rides that can be matched, (ii) the expected vehicle distance traveled; (iii) the expected passenger distance traveled; (iv) the fleet size required, and (v) the average passenger trip time including waiting and riding. The formulas developed reveal that for the full range of feasible fleet sizes, ridesharing with detour distance guarantees outperforms both ordinary ride-sharing and ordinary taxi. This suggests that there is a business opportunity that is not currently being exploited.