The Role of Surge Pricing on a Service Platform with Self-Scheduling Capacity

  title={The Role of Surge Pricing on a Service Platform with Self-Scheduling Capacity},
  author={G{\'e}rard P. Cachon and Kaitlin M. Daniels and Ruben Lobel},
  journal={Manufacturing & Service Operations Management},
Recent platforms, like Uber and Lyft, offer service to consumers via “self-scheduling” providers who decide for themselves how often to work. These platforms may charge consumers prices and pay providers wages that both adjust based on prevailing demand conditions. For example, Uber uses a “surge pricing” policy, which pays providers a fixed commission of its dynamic price. With a stylized model that yields analytical and numerical results, we study several pricing schemes that could be… CONTINUE READING
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