Stochastic Differential Game Analyses of Tailored Taxi Service Coordination by Cost Sharing Contract

Abstract

Abstract. Cooperation of all the members in the tailored taxi service plays an important role in the development of this fast-developing service industry. The platform enterprise can encourage cooperation from special car drivers by sharing their cost during the service, which we assume can increase the sales by accumulating the reputation of the service model. A differential game model is established with tailored taxi service that consists of one platform enterprise and one special car driver and we derive the optimal solutions of the Stackelberg equilibrium with the platform enterprise as the leader who partially shares the cost of the efforts of the driver and the cooperative game that both layers make efforts together to get the most profits of this system. The results make the benefits of the cost sharing contract in increasing the profits of both players as well as the whole service system, which means that the cost sharing contract is an effective coordination mechanism in the long-term relationship of the members in the service system.