Transportation service is rapidly changing in past few decades. On one hand, ride- sharing services in the sharing economy impacts the transportation industry. On the other hand, autonomous vehicles may also revolutionize transportation services. We consider a transportation service provider choosing between offering ride-sharing services or autonomous vehicle services. For each service mode, we derive its optimal prices, subsidies, revenue sharing proportions, and quantity of vehicle deployment. A comparison between these two modes is then conducted. We find that the autonomous vehicle service is more profitable than the ride-sharing one under economy of scale. Interestingly, the optimal service price decreases in the cost of deploying autonomous vehicles. Our study thus sheds lights in the choice of quality incentive and price incentive.
Kung, Ling-Chieh and Lin, Ching-Chieh, "Autonomous vehicle services or ride-sharing services? A game theoretic investigation" (2018). PACIS 2018 Proceedings. 267.