Zone-Agnostic Greedy Taxi Dispatch Algorithm Based on Contextual Matching Matrix for Efficient Maximization of Revenue and Profit

This paper addresses the taxi fleet dispatch problem, which is critical for many transport service platforms such as Uber, Lyft, and Didi Chuxing. We focus on maximizing the revenue and profit a taxi platform can generate through the dispatch approaches designed with various criteria. We consider determining the proportion of taxi fleets to different destination zones given the expected rewards from the future states following the distribution decisions learned through reinforcement learning (RL) algorithms. We also take into account more straightforward greedy algorithms that look ahead fewer decision time steps in the future. Our dispatch decision algorithms commonly leverage contextual information and heuristics using a data structure called Contextual Matching Matrix (CMM). The key contribution of our paper is the insight into the trade-off between different design criteria. Primarily, through the evaluation with actual taxi operation data offered by Seoul Metropolitan Government, we challenge the natural expectation that the RL-based approaches yield the best result by showing that a lightweight greedy algorithm can have a competitive advantage. Moreover, we break the norm of dissecting the service area into sub-zones and show that matching passengers beyond arbitrary boundaries generates significantly higher operating income and profit.