Driver Navigation With Distance-Weighted Surge Pricing
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Solution Overview
Problem
Existing transportation systems face issues with surge pricing discrepancies due to discrete zone-based pricing models, leading to inefficiencies and gaming of the system by users near zone boundaries, which do not accurately reflect the actual travel distance and demand.
Innovation Solution
Implementing a distance-weighted continuous pricing function that calculates fares based on the proximity to multiple reference locations, using a weighted average of pricing models to smooth out price gradients and eliminate abrupt changes at zone boundaries.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Device complexity
If discrete zone-based pricing models are used, then pricing simplicity is maintained, but pricing accuracy and fairness deteriorate due to abrupt changes at zone boundaries
Solution Approach 1:
The pricing model segments the geographic area into multiple zones with different base fares, but applies continuous distance-weighted calculations within and across zones. This maintains the simplicity of zone-based structure while eliminating abrupt price changes at boundaries through weighted averaging of adjacent zone fares based on proximity to each zone's centroid.
Solution Approach 2:
The patent changes the pricing parameter from discrete zone-based fixed fares to continuous distance-weighted fares. The fare for a trip is calculated by weighting the fares of all zones that the trip passes through, with weights determined by the proportion of the trip distance within each zone. This creates smooth price gradients instead of abrupt changes.
2Ease of operation
If discrete zone boundaries are implemented, then geographic segmentation is achieved, but system integrity deteriorates due to gaming behavior near boundaries
Solution Approach 1:
The patent creates equipotential pricing by ensuring that the fare is continuous across zone boundaries. By using distance-weighted averaging, the fare at any point on a zone boundary equals the fare calculated from either adjacent zone, eliminating price arbitrage opportunities and gaming behavior while maintaining geographic segmentation.
Solution Approach 2:
The patent introduces distance-weighted averaging as an intermediary mechanism between discrete zones. This intermediary calculation method smooths transitions across zone boundaries, preventing users from exploiting boundary effects while preserving the underlying geographic zone structure for pricing purposes.
3Measurement precision
If continuous distance-weighted pricing is used, then fare accuracy improves, but computational complexity increases
Solution Approach 1:
The calculation is segmented into discrete zones with pre-calculated centroids and fare values. Instead of continuously integrating across the entire geographic area, the system divides the space into manageable zones and applies weighted averaging based on the proportion of trip distance within each zone, significantly reducing computational complexity while maintaining accuracy.
Solution Approach 2:
The patent calculates fares by considering only the zones that the trip actually passes through, rather than all possible zones in the service area. This partial action approach reduces the number of calculations needed while still achieving accurate distance-weighted pricing for the relevant geographic regions.
Data Source
AI summary
In one embodiment, a method comprises receiving, at a server comprising at least one processor, a transportation request from a computing device of a passenger, the transportation request specifying a pickup location; and determining, by the server, a surge pricing multiplier and a surge pricing cap for the transportation request based on the pickup location, the surge pricing cap representing a maximum amount of a fare for the transportation request that is subject to a surge pricing surcharge.