Driver guidance and rebalancing in ride-hailing systems through mixture density networks and stochastic programming

We propose a data-driven optimization model to reduce riders' wait time for vehicle guidance and rebalancing operations, considering the rider demands are under uncertainty. Instead of assuming a pre-defined rider demand distribution, we propose a data-driven framework that integrates Mixture Density Networks (MDNs) and a two-stage stochastic programming model. The integrated framework can compute high-quality guidance and rebalancing solutions that benefit drivers and riders in the ride-hailing system by leveraging the time-series historical data from real data sets. To prove the performance and effectiveness of our approach, we conduct a group of simulations based on the New York High Volume For-Hire Vehicle (HVFHV) trip records. The validation results show that the proposed method outperforms the data-driven deterministic models using GRU and moving average methods. Most significantly, the riders' average wait time using our proposed approach can be reduced by 75.9% compared to the batched matching mechanism.