Seeking Based on Dynamic Prices: Higher Earnings and Better Strategies in Ride-on-Demand Services

In recent years, ride-on-demand (RoD) services such as Uber and DiDi are becoming increasingly popular. Different from traditional taxi services, RoD services adopt dynamic pricing mechanisms to manipulate the supply and demand on the road, and such mechanisms improve service capacity and quality. Seeking route recommendation has been widely studied in taxi service. In RoD service, the dynamic price is a new and accurate indicator describing the supply and demand, but it is yet rarely studied in providing clues for drivers to seek for passengers. In this paper, we propose to incorporate the impacts of dynamic prices as a key factor in recommending seeking routes to drivers. We first justfiy why it is necessary to recommend seeking routes and consider dynamic prices, by analyzing real service data from a typical RoD service. We then design a reinforcement learning model based on order and GPS trajectories datasets, and take into account dynamic prices in the design. Results prove that our model improves both driver earnings and seeking strategies. On driver earnings, the reinforcement learning model increases revenue efficiency by up to 34.52%, and considering dynamic prices leads to another increase of 6.19%. On seeking strategies, drivers are encouraged to serve local demand first, and they are redistributed more evenly and effectively.