Evaluating the Environmental Benefits of Personalized Travel Incentives in Dynamic Carpooling

Abstract

In a dynamic carpooling system, drivers and riders with their own intended travel plans are matched on short notice. The performance of such a system largely depends on the carpool participants’ travel flexibility (the extent to which a detour is tolerated or the willingness to accept a slightly different drop-off location). To increase travel flexibility, an incentive scheme can be introduced for carpool participants to opt for. For instance, a driver specifies how much she/he expects to be compensated (e.g., $5) if the earliest departure time is shifted to be earlier than the originally scheduled time by a certain amount (e.g., 10 minutes). Similarly, an interested passenger reports the expected incentive to willingly accept a different destination (such as a nearby transit stop or coffee shop) deviating from the request. In this dynamic carpool matching problem with incentives, the following decisions are jointly optimized from the perspective of a carpool matching coordinator: 1) incentive allocations to drivers and riders, 2) assignments of riders to drivers, and 3) vehicle routes of drivers. A case study based on data from Washington, D.C. is conducted to evaluate the potential of the personalized incentives offered to carpool participants in mitigating the environmental impact of transportation (quantified by the reduction of vehicle miles traveled). Two notable findings are reported. First, one dollar of incentive could reduce vehicle miles travelled by 2.88 in one benchmark case. Second, driver incentives are shown to be much more effective than rider incentives under reasonable cost assumptions.