Study suggests how much competition in the urban ride market can grow before gridlock sets in

Competition should be good for consumers because they will have more options. Having too many vehicles in the city adds to congestion. How can cities balance?

A new study co-authored by MIT researchers, in collaboration with the Institute for Informatics and Telematics of the National Research Council of Italy, provides a model that shows the extent to which ride-sharing competition causes traffic jams.

Carlo Ratti, a professor in MIT's Department of Urban Studies and Planning (DUSP) and co-author of a new book, says that by not coordinating ride-hailing companies, we are creating a huge amount of additional traffic.

The paper, The cost of non-cordination in urban on-demand mobility, is published today in Nature Scientific Reports.

The authors are Daniel Kondor, a researcher with the Singapore-MIT Alliance for Research and Technology (SMART); Iva Bojic, a researcher with SMART; and Giovanni Resta, a researcher at the Institute for Informatics and Telematics of the National Research Council of Italy.

The cost is measured in terms of traffic.

In order to conduct the study, the research team obtained taxi data that allowed them to determine where people would like to take a ride. The number of trips ranged from 300,000 in Vienna to 150 million in New York.

The researchers modeled the flow of traffic needed to pick up all the passengers with optimal efficiency, as well as scenarios in which multiple firms competed independently of one another. The team was able to figure out the effects of adding new ride-hailing firms to a market.

The scholars found that the number of vehicles that would be deployed in an attempt to meet demand varied depending on the size of the ride-sharing firm. A new competitor entering the market in Manhattan would increase the number of ride-providing vehicles by 3 percent. In Curitiba it is 67 percent, and in Singapore it is 8 percent. The researchers call it the cost of noncoordination in the industry.

Santi says that it is positive to have multiple providers, but that there is a price to pay if they are not coordinated.

If you allow everyone to do their own thing, it creates extra congestion. You don't get the closest car, but you might get a ride from an other company.

The density of passenger demand and average traffic speed are the biggest factors affecting the number of vehicles needed. Adding a new company to the market will not change the amount of vehicles being used to pick up customers in Manhattan. In Curitiba, where passengers are more spread out, a ride-sharing company operating on its own would lead to a bigger proportion of new vehicles on the road.

Santi observes that even if you don't coordinate, you still have a good pool of vehicles to draw from. The speed of traffic is a factor. You might need a vehicle that is further away in a noncoordinated market. If the traffic speed is high, that might be okay, but if the traffic speed is low, it might be very inefficient to serve that customer.

One platform for many firms?

The results strongly point to the policy of having one main ride-sharing platform for consumers in a given city, which all competing firms could use. Even though market competition still exists, that could enhance efficiency.

Ratti says that this doesn't mean arguing for less competition. It is a matter of regulation by the cities. We are not arguing for anything new because these markets are heavily regulated.

Many U.S. cities already have bike-sharing services that could be used for on-demand mobility.

It's not clear whether metropolitan areas will move in that direction. The modeling in the paper provides a tool that any city's experts could use to keep refining their mobility and traffic policies.

More information: Dániel Kondor et al, The cost of non-coordination in urban on-demand mobility, Scientific Reports (2022). DOI: 10.1038/s41598-022-08427-2 Journal information: Scientific Reports Citation: Study suggests how much competition in the urban ride market can grow before gridlock sets in (2022, March 22) retrieved 22 March 2022 from https://phys.org/news/2022-03-competition-urban-gridlock.html This document is subject to copyright. Apart from any fair dealing for the purpose of private study or research, no part may be reproduced without the written permission. The content is provided for information purposes only.