Pricing Techniques to Promote Shared Rides and Reduce Carbon Emissions of Ride-Hailing

Sharing rides emits less carbon per capita than private ride-hailing. This paper presents a pricing method to attract more users from solo ride-hailing to shared rides and reduce total carbon emissions. The pricing method includes offering incentives for shared rides and collecting extra fees for exclusive ride-hailing. We designed a mechanism that all extra fees from exclusive ride-hailing subsidize the incentives for shared rides, resulting in fewer per-capita emissions. A binary logit model is constructed to embody how the incentives and extra fees affect users’ choices toward ride-sharing and exclusive ride-hailing. We measure the overall carbon emissions reduction if shifting riders from exclusive ride-hailing to shared rides in a ride-sourcing instance. We ascertain the extent of choice utility impacted by incentives and fees through an SP survey. Results show that the proposed mechanism effectively reduces the total carbon emissions of the online ride-hailing instance by 20%−25% and suggest that people are more sensitive to extra fees than incentives.