Fleet pricing for transportation network optimum: a new private-public partnership

Description:

2023-230 - Smart Subsidy Routing – A Public-Private Model with Scalable Fleet Incentives for Urban Traffic Optimization

Abstract

Novel system that enables cities to reduce traffic congestion and optimize urban transportation networks – all without investing in new infrastructure.
Introduces a public-private partnership model where agencies offer rerouting subsidies, in which subsidies can also be a surcharge, through fleet operation & management platforms like Uber, Lyft, UPS, Fedex, Pitt-Ohio, and Robotaxi to incentivize users to voluntarily assist in the optimization of urban transportation networks.
The technology is deployable entirely within existing fleet operation & management ecosystems – no new enforcement mechanisms or tolling infrastructure required.
Integrates Fleet Optimum with Service Constraints (FOSC), a cooperative routing strategy that ensures rider equity while improving overall fleet efficiency and reducing urban congestion.
Validated through simulations across real-world city networks.
Results demonstrate that small, strategically targeted subsidies or surcharges redirecting traffic from congested routes produces significant reductions in total travel time for the entire network.
Supports transportation equity and sustainability goals by incentivizing voluntary rider participation in congestion relief efforts.

Benefit

Smart Subsidy Routing is a scalable, infrastructure-free congestion mitigation tool built for modern urban mobility ecosystems. Through dynamic link-based subsidies delivered within existing fleet operation & management structures, agencies gain real-time, dynamic control over fleet routing behavior to improve transportation network efficiency without reliance on toll roads or surveillance-heavy enforcement.

It is a voluntary, equitable solution to reduce traffic congestion in urban environments. Simulation studies in major U.S. cities indicate that modest subsidies, applied to only a few key road segments, produce outsized gains in network efficiency.

This solution creates mutual value for all parties:
1. Agencies gain a cost-effective, politically viable congestion relief mechanism.
2. Transportation Network Companies (TNCs) benefit from optimized fleet operations and new
revenue streams via public subsidies.
3. Riders retain authority over their decision to take a less direct route. Riders also gain additional
flexibility, experience reduced travel time due to optimized transportation networks, and save
money when it is convenient to select less congested routes.