Carpooling and the Economics of Self-Driving Cars

Carpooling and the Economics of Self-Driving Cars

By Michael Ostrovsky, Michael Schwarz
February 12,2018Working Paper No. 3636

We study the interplay between autonomous transportation, carpooling, and road pricing. We discuss how improvements in these technologies, and interactions among them, will affect transportation markets. Our main results show how to achieve socially efficient outcomes in such markets, taking into account the costs of driving, road capacity, and commuter preferences. An important component of the efficient outcome is the socially optimal matching of carpooling riders. Our approach shows how to set road prices and how to share the costs of driving and tolls among carpooling riders in a way that implements the efficient outcome