Usage Coordination Utilizing Flexible Contracts in Free-floating Car Sharing

We propose a novel distributed user-car matching method based on a contract between users to mitigate the imbalance problem between vehicle distribution and demand in free-floating car sharing. The previous contract-based regulation method assumes that contracts are binding. However, car-sharing systems users are in dynamic environments, and such binding fails to accommodate future events. Therefore, to overcome this drawback, we introduce a leveled-commitment contract into contract-based coordination among drop-off and pick-up users. In our method, an auction is conducted for drop-off users’ intended drop-off locations, and users are allowed to decommit from contracts by paying penalties. The amount of penalty is determined by considering the trade-off between the sunk cost due to movement and social surplus. We thoroughly evaluated the proposed method with a baseline method on a free-floating car-sharing simulator. The results show that it achieved a higher social surplus than the existing method when demand frequently occurred.