Real-time bidding based vehicle sharing

Abstract

We consider one-way vehicle sharing systems where customers can pick a car at one station and drop it off at another (e.g., Zipcar, Car2Go). We aim to optimize the distribution of cars, and quality of service, by pricing rentals appropriately. However, with highly uncertain demands and other uncertain parameters (e.g., pick-up and drop-off location, time, duration), pricing each individual rental becomes prohibitively difficult. To overcome this difficulty, we propose a new approach for vehicle sharing based on a bidding mechanism reminiscent of Priceline or Hotwire.