Efficiency of the carpooling service: Customer waiting and driver utilization

Abstract

The carpooling service, which is the sharing of journeys heading in similar directions, is expected to be more efficient. In this article, we study the impact of providing a carpooling service on customer waiting time and driver utilization in an on-demand service platform. We build an (Formula presented.) queueing model to approximate the dynamics of the on-demand service platform that provides two services: a standard service and a carpooling service. We find that two factors influence the efficiency of the carpooling service: the source of customers who use the carpooling service, and the length of a normalized detour. If the carpooling service attracts customers who have not used this on-demand service before, i.e., the market size increases, then both the customer waiting time and driver utilization increase when more customers use the carpooling service. If the carpooling service primarily attracts customers who already use the standard on-demand service before, i.e., customers switch from the standard service to the carpooling service, then the impact of the carpooling service depends on the normalized detour. It is possible that customer waiting time and driver utilization first increase and then decrease as customers switch from the standard service to the carpooling service.