An Incentive Strategy for the Retention of Impatient Passengers in Ride-Sourcing Markets

A prominent problem plagued the ride-sourcing service providers is the instantaneous real-time demand-supply imbalance. This entails terrible user experience and causes adverse sustainable results such as customer churn for the platform, which will damage both drivers' income and the platform revenue. To reduce passengers’ abandonment due to long waiting time by improving their waiting experience, we propose an incentive-based queue management strategy— a discount method— to retain passengers in a post-peak period. We regard the waiting process for a ride-sourcing service as an M/M/1+M queue system with impatient passengers, and model passengers’ reneging behaviors by characterizing the impact of waiting discounts and updated queue information on their travel utilities. Based on such a behavior model, we aim to maximize the platform's profit growth by tailoring the discount strategy. Through the numerical experiments, we show that the discount strategy can effectively increase the platform profit and drivers' income. The earlier the strategy is implemented in the post-peak period, the higher platform profit and drivers’ income can be achieved. Moreover, we explore the impact of queueing system parameters on the performance of the discount strategy.