A Game Theoretic Solution for the Territory Sharing Problem in Social Taxi Networks

Recent years have witnessed a surge of new methods by which commuters are accessing transportation modals. The use of social taxi networks is one of the most promising door-to-door transportation methods. In social taxi networks, commuters use their smart devices to contact social taxi service providers based on their geographical proximity and the listed fare prices. These taxis can be traditional taxis or privately owned vehicles. However, with the success of this new car hailing mechanism, there is an emergence of a number of problems. One of these problems is the territory allocation problem. i.e., the majority of social taxi drivers choose areas in which the most likely number of customers will be present. Therefore, they negatively impact each other’s profit by offering a high supply of services. This paper develops a cooperative territory allocation approach such that, through negotiation between service providers, can reduce the conflict between taxi drivers. Game theory is used to formulate the territory sharing problem, which can be solved using bargaining-based solution model. The solution model is designed to correspond to a no regret game for which the outcome corresponds to a coarse correlated equilibrium. Simulation work results are provided to support the findings in this paper.