A Dynamic Pricing Strategy in Divided Regions for Ride-Hailing

Nowadays, ride-hailing services play a significant role in daily transportation. In the ride-hailing system, the temporal and spatial distribution of demand and supply in different regions is different. Therefore, it is necessary to differentiate pricing for regions based on demand and supply. Instead of setting discriminatory prices by simply dividing the whole area into some fixed regions, which failed to take into account the demand and supply dynamics over time, we developed a dynamic region-division based pricing strategy according to demand and supply in different regions, with the goal of maximizing the platform’s long-term profit. Furthermore, we perform comprehensive experiments on a real-world dataset to demonstrate the effectiveness of the proposed algorithm. The experimental results indicate that our algorithm can outperform other typical benchmark approaches.