The Path to Green in Ride-Hailing

<p>Ride-hailing platforms are working toward achieving greener mobility. To this end, they are implementing policies that make driving zero tailpipe-emission electric vehicles (EVs) an economically attractive choice for ride-hailing drivers. In this study, we use optimization and robust queueing to show how ride-hailing platforms can effectively achieve a carbon-intensity target, while maintaining a service level guarantee. We model the choice of drivers between a gasoline vehicle (GV) and an EV based on the platform’s ride allocation policy and take rate policy. Our results suggest that, to meet the carbon-intensity target, ride-hailing platforms should offer a lower take rate to EV drivers, which results in a higher share of the ride fare for EV drivers compared to GV drivers. Interestingly, the gap in take rates decreases as the carbon-intensity target becomes more aggressive. We also show that a fixed per-ride bonus incentive for EV drivers achieves equivalent outcomes in EV driver participation, carbon emissions and platform profitability than the reduced take rate incentive structure. We show that relaxing the service-level guarantee can help the platform achieve aggressive carbon-intensity targets. Our study also highlights the critical role of EV rentals suppliers in supporting ride-hailing platforms’ transition to greener mobility. We show that, under optimal policies and well-structured partnership agreements, EV rentals should be operated at the highest possible utilization, surpassing that of gasoline vehicles. We further analytically characterize the EV supply that ride-hailing platforms need from their rental partners to achieve their carbon-intensity target. To assess the practical effectiveness of our proposed policies, we conduct a simulation study using real-world data on Uber travel times and EV charging infrastructure in the Tampa Bay area. Our study identifies novel financial and operational levers for ride-hailing platforms looking to reduce their carbon emissions.</p>