All posts by yni957

Recent research

To pool or not to pool

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To Pool or Not to Pool: Equilibrium,  Pricing and Regulation

This paper was the first published based on  Kenan’s PhD research. It introduces ride-pooling into the equilibrium analysis of the ride-hail market and analyzes the effect of pricing strategies and various regulations on pooling.

After the first draft is completed in the Spring of 2019,  it took almost two years  to move the paper through various stages of the review process, first at Management Science, then at Transportation Research Part B (three rounds). While the long waiting was no doubt frustrating, the quality of the paper might have benefited from intensive scrutiny and repeated revisions.  For a preprint, please check here; the link to the final version is here.

Abstract: We study a monopoly transportation network company (TNC) in an aggregate market that offers on-demand solo and pooling e-hail services, while competing with transit for passengers. The market equilibrium is established based on a spatial driver-passenger matching model that characterizes the passenger wait time for both solo and pooling rides. We prove, under mild conditions, this system always has an equilibrium solution. Built on the market equilibrium, three variants of pricing problems are analyzed and compared, namely, (i) profit maximization, (ii) profit maximization subject to regulatory constraints, and (iii) social welfare maximization subject to a revenue-neutral constraint. A comprehensive case study is constructed using TNC data collected in the city of Chicago. We found pooling is desirable when demand is high, but supply is scarce. However, its benefit diminishes quickly as the average en-route detour time (i.e., the difference between the average duration of solo and pooling trips) increases. Without regulations, a mixed strategy—providing both solo and pooling rides—not only achieves the highest profit and trip production in most scenarios, but also gains higher social welfare. The minimum wage policy can improve social welfare in the short term. However, in the long run, the TNC could react by limiting the size of the driver pool, and consequently, render the policy counterproductive, even pushing social welfare below the unregulated level. Moreover, by maintaining the supply and demand of ride-hail at an artificially high level, the minimum wage policy tends to exacerbate traffic congestion by depressing the use of collective modes (transit and pooling). A congestion tax policy that penalizes solo rides promotes pooling, but consistently harms social welfare. However, it promises to increase both social welfare and pooling ratio, when jointly implemented with the minimum wage policy.

Recent research

Travel demand management practice in China

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This article stemmed from a research report commissioned by World Bank back in 2019.   I’ve never tried to publish it in a journal, though my friend Daizong Liu had helped translate it into Chinese and published it online through his very successful Wechat public platform (一览众山小).  The article reviews the travel demand management practice in China and attempts to draw some useful lessons from it.  You may read the abstract below and download the Egnlish version at ChinaTDM.

Lessons Learned from China’s Travel demand management practice

China’s car ownership has been expanding at a staggering pace in the past two decades. The rapid motorization brought unprecedented level of traffic to its densely populated cities
unprepared to accommodate it, causing severe congestion and air pollution problems. Chinese cities have responded to these challenges with sweeping travel demand management (TDM) measures. The practice of TDM in China is unique not only because it is large in scale and broad in scope, but also because it occurs against the backdrop of a fast and historical transition of the most populous country on earth. The objective of this note is to review and document this practice, discuss its outcomes and lessons, and examine what the rest of the world could learn from it.

Book review, English writing

Antifragile

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This short review was originally written in April of 2021.

Overall,  Antifragile is a disappointment.  This is not to say it offers no interesting and useful ideas. It does.  What strikes me the most are the oversized impact of tail events (black swans) and their utter unpredictability, our ruinous obsession with optimization and intervention, and the agent problem ubiquitous in modern societies.  However, Taleb could have explained these ideas in 40 pages. Instead, he wrote 400, filling many of them with impulsive bragging, as well as his signature rant against the entire intellectual establishment.  In the end, I felt these self-inflicted distractions severely undermine the narrative and the logic flow.    I was looking forward to reading Black Swan, but after this experience, I wonder whether it would be worth my time.

A special note for my fellow academics who might be interested in Taleb’s work: he absolutely hates professors and minces no words berating them, so if you take the challenge, buckle up for a bumpy ride.

Recent research

Hyperbush

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Hyperbush Algorithm for Strategy-based Equilibrium Traffic Assignment Problems

This recent paper extends the concept of bush to hyperbush and uses it devise a new class of algorithms for strategy-based traffic equilibrium assignment problem, of which frequency-based transit assignment is an archetype.  One of the longest papers that I’ve ever written (nearly 50 pages), the paper just appeared online in Transportation Science.    Here is a preprint  Hyperbush.

Strategy-based equilibrium traffic assignment (SETA) problems define travel choice broadly as a strategy rather than a simple path. Travelers navigating through a network based on a strategy end up following a hyperpath. SETA is well suited to represent a rich set of travel choices that take place en-route at nodes, such as transit passengers’ transfer decision, truckers’ bidding decision and taxi drivers’ re-position decision. This paper recognizes and highlights the commonalities among classical and emerging SETA problems and proposes to unify them within a same modeling framework, built on the concept of hypergragh. A generic hyperbush algorithm (HBA) is developed by decomposing a hypergraph into destination-based hyperbushes. By constructing hyperbushes and limiting traffic assignment to them, HBA promises to obtain more precise solutions to larger instances of SETA problems at a lower computational cost, both in terms of CPU time and memory consumption. To demonstrate its generality and efficiency, we tailor HBA to solve two SETA problems. The results confirm HBA consistently outperforms the benchmark algorithms in the literature, including two state-of-the-art {hyperpath-based} algorithms. To obtain high-quality equilibrium solutions for SETA instances of practical size, HBA runs up to five times faster than the best competitor with a fraction of its memory consumption.

Recent research

Transit Design in Response to a Global Pandemic

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Optimizing Operational Strategies for Mass Transit Systems in Response to a Global Pandemic

This is one of my COVID inspired research projects that was started in 2020.  The idea is that, in order to operate safety during a pandemic, transit agencies might have to adjust their operational strategies, in terms of service frequency and capacity.  The underlying tradeoff we are trying to explore here is that between the benefit of frequently testing drivers (as it reduces the transmission risk) and the cost of lowering the number of passengers allowed in buses, subject to the need to maintain certain safety standard, measured by infection risks. A novelty of the work is a physical model aiming to estimate infection risks based on vehicle size/type, service capacity and a few external risk factors.

The paper is currently under revision at Journal of Transportation Research Part A.   Please download a preprint here.

Abstract              This study analyzes the risk involved in riding various transit modes during and after a global pandemic. The goal is to identify which factors are related to this risk, how such a relationship can be represented in a manner amenable to analysis, and what a transit operator can do to mitigate the risk while running its service as efficiently as possible. The resulted infection risk model is sensitive to such factors as prevalence of infection, baseline transmission probability, social distance, and expected number of human contacts. Built on this model, we formulate, analyze and test three versions of a transit operator’s design problem. In the first, the operator seeks to jointly optimize vehicle capacity and staff testing frequency while keeping the original service schedule and satisfying the infection risk requirement. The second model assumes the operator is obligated to meet the returning demand after the peak of the pandemic. The third allows the operator to run more than one transit line and to allocate limited resources between the lines, subject to the penalty of unserved passengers. We find: (i) The optimal profit, as well as the testing frequency and the vehicle capacity, decreases when passengers expect to come in close contact with more fellow riders in a trip; (ii) Using a larger bus and/or reducing the testing cost enables the operator to both test drivers more frequently and allow more passengers in each bus; (iii) If passengers weigh the risk of riding bus relative to taxi, a higher prevalence of infection has a negative effect on transit operation, whereas a higher basic transmission probability has a positive effect; (iv) The benefit of improving service capacity and/or testing more frequently is limited given the safety requirement imposed. When the demand rises beyond the range of the capacity needed to maintain sufficient social distancing, the operator has no choice but to increase the service frequency; and (v) In the multi-line case, the lines that have a larger pre-pandemic demand, a higher penalty for each unserved passenger, or a greater exposure risk should be prioritized.

Book review, English writing

Post War

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One of the good things that came out of COVID19 pandemic is I suddenly discovered (or rediscovered?) a new hobby: reading.  Post War is among the first books I read after the pandemic starts. This short review was written in December 2020.

Tony Judt’s Post War is a great read for anyone who is curious about Europe since WWII.  You may be disappointed if you expect a completely objective narrative based on data and stories. Don’t get me wrong—Judt is a good storyteller and he tells a wide range of stories, in fact, so broad he even commented on David Beckham, describing him as “an English player of moderate technical gifts but an unsurpassed talent for self-promotion”….He does, however, insistently make you feel his presence, preference, and emotions in these stories. I love his style, but I realize some may prefer historians without strong opinions.

Judt never hides his love for the “European Social Model”, which recognizes the state has the duty to “shield citizens from the hazards of misfortune or the market”, and “social responsibility and economic advantage should not be mutually exclusive”.  At the end of the book, he passionately compares Europe with America and China, writing, “America would have the biggest army and China would make more, and cheaper, goods. But neither America nor China had a serviceable model to propose for universal emulation. In spite of the horrors of their recent past—and in large measure because of them—it was Europeans who were now uniquely placed to offer the world some modest advice on how to avoid repeating their own mistakes. Few would have predicted it sixty years before, but the twenty-first century might yet belong to Europe.”

Recent research

An Efficiency Paradox of Uberization

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The main finding is that e-hail (e.g., Uber and Lyft) may not scale as well as street-hailing taxi.  In other words, a thicker market may help improve the performance of taxi more than that of e-hail. We develop a physical model to describe the matching process of both modes. Using the model, we then derive the production function and measure the returns to scale in the matching process.  It indicates that taxi has returns to scale of  2 (implying increasing returns to scale) whereas e-hail has returns to scale of 1 (constant returns to scale).   Empirical data collected in Shenzhen, China largely confirm the theory.

While this paper has yet to be published, I must have spent more time writing and revising it than any of my other papers.  Hongyu convinced me to write it  for a general journal, which, with the benefit of hindsight, might have caused us to oversell an otherwise fine idea.   That being said, I did learn a lot from the process, and I still think it is one of my better works.   The preprint is here, and the abstract follows.

Uberization promises to transform society based on an intuitive proposition: Advanced peer-to-peer matching guarantees greater overall efficiency. Here we show a paradox challenging this proposition in uberized ride-hail service, known as e-hail. By analyzing hundreds of local markets in Shenzhen, China, we discover e-hail is outperformed—in terms of wait time and trip production—by taxis hailed off street in areas with high densities of passengers and drivers. This paradox arises because a quicker match does not always expedite and enhance a service. On the contrary, it can induce competition that undermines the network effect, making a passenger less likely to benefit from more drivers, and vice versa, in e-hail than in taxi service. Consequently, simply attracting more users may not improve e-hail’s efficiency (defined as trip production at a given density of passengers and drivers), because its competitive edge diminishes with scale. The finding implies uberization has a limited impact on efficiency and is unlikely to create a “winner-take-all” in transportation

Recent research

A-PASS for Travel Demand Management

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Auction-Based Permit Allocation and Sharing System (A-Pass) for Travel Demand Management, co-authored by Ruijie Li and Xiaobo Liu (both at Southwest Jiaotong University, China).

This is a follow up to another paper related to the mechanism design problems arising from ridesharing.  In this paper, we try to show the promise of integrating ridesharing with quantity-based travel demand management.  One of the main insights is that by auctioning out permits (e.g., to use a road facility), we can eliminate the deficits that are otherwise unavoidable in classical  Vickrey-Clark-Gloves mechanism.  The paper just came out in Transportation Science. You may read the abstract below and download a preprint here.

We propose a novel quantity-based demand management system aiming to promote ride-sharing. The system sells the permit to access a facility (conceptualized as a bottleneck) by auction but encourages commuters to share the permits with each other. The permit is classified according to access time and the commuters may be assigned one of the three roles: solo driver, ride-sharing driver, or rider. At the core of this auction-based permit allocation and sharing system (A-PASS) is a trilateral matching problem (TMP) that matches permits, drivers and riders. We formulate TMP as an integer program, and prove it can be reduced to an equivalent linear program. A pricing policy based on the classical Vickrey-Clark-Gloves (VCG) mechanism is proposed to determine the payment for each commuter. We prove, under the VCG policy, different commuters will pay exactly the same price as long as their role and access time are the same. We also show A-PASS can eliminate any deficit that may arise from the VCG policy by controlling the number of shared rides. Results of numerical experiment suggest A-PASS strongly promote rider-sharing. As ride-sharing increases, all stake holders are better off: the ride-sharing platform receives greater profits, the commuters enjoy higher utility, and the society benefits from more efficient utilization of infrastructure.

Recent research

A Physical Model of Street Ride-Hail

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The work was initiated by my former student, Hongyu Chen, as part of his PhD research.  He wanted to build a “physical model” of street-hail taxi matching that can be calibrated and validated with real data (taxi trajectory).  This is very difficult because passenger wait time cannot be directly observed in taxi trajectory data. Hongyu came up with a rather clever and elaborated method to accomplish just that. Read the abstract below and download the paper here.

In this study, we show that the passenger-driver matching process in street ride-hail is dictated by the physical limitation of a passenger’s average eyesight and the preference of cruising taxi drivers for certain locations. Together, these two spatiotemporal features, called effective hail distance (EHD) and local area attractiveness (LAA) respectively, define the number of vacant taxis that a passenger can reach, and accordingly the distribution of her waiting time. To calibrate the waiting time distribution, we extract maximum possible waiting times from taxis GPS trajectory data, by tracking the movements of vacant taxis cruising around a pickup location. Then we prove that, for a given EHD, the extracted maximum possible waiting time follows the same distribution as passenger waiting time. The proposed matching mechanism, along with the novel calibration method, leads to a general model of street ride-hail that can produce reliable estimates of passenger waiting time under a wide variety of market conditions. Moreover, the matching process in the phone-based ride-hail is shown to be a special case of the proposed model, when EHD approaches infinity. This result lays the foundation for understanding and comparing the performance of ride-hail services. It can also help address regulatory and operational questions facing key stake holders in this industry.

housekeeping

My first post

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I finally decided that I need a research+blog type place to share my work and writing.   My student told me  Northwestern provides a web-hosting service based on WordPress.  I have a few hours to spare since it is a MLK day. The tool seems quite reasonable and hence I took the plunge.  Let’s see how it goes…