Collaborative Vehicle Routing for Auction-based Pickup and Delivery Dispatch Services

The surge pricing in ride-hailing applications made customers and partners difficult to decide their bookings. Auction-based approaches are often used to optimize the costs of parties involved such as customers, drivers, and service providers and the overall performance of the whole system. Balancing the benefits of parties involved is a challenging issue. By analyzing current auction-based and fixed-price models for pickup and delivery dispatch systems, this paper identifies sustainable constraints and objectives for adapting the auction-based solutions to today highly competitive market, and formalizes the problem in a three-index mathematical model. A modified genetic algorithm with more actual biological features and the ability to abbreviate the converge time is introduced to tackle this problem. Computational results on models with optimization solver, original and modified genetic algorithms are included to illustrate the advantages of the proposed solution.