Pricing and resource allocation under competition in a docked bike-sharing market

Bikesharing is an economical and convenient way to serve urban travelers. As the number of bikesharing companies in the market increases, however, their competition complicates their resource planning, deployment, and operational decisions, and in turn leads to inefficiency and societal disbenefits. In this paper, we develop a game-theoretical model to study how two dock-based bikesharing companies, while competing against each other in a market, determine their strategic and operational decisions such as those related to dock-station location, bike fleet size and distribution, bike rebalancing, and pricing. We model the companies’ competition as a generalized Nash equilibrium problem (GNEP), in which the bike users’ bike selection and demand fulfillment behavior is described by a set of nonlinear logical constraints. We then reformulate the nonlinear model into a linear one, whose equilibrium solution can be solved by commercial solvers. We conduct a series of experiments to demonstrate how the proposed model can be used to improve the decision making process of the competing companies, and to draw insights on the associated market performance.