Order Acquisition Under Competitive Pressure: A Rapidly Adaptive Reinforcement Learning Approach for Ride-Hailing Subsidy Strategies

TL;DR

This paper introduces FCA-RL, a reinforcement learning framework that rapidly adapts ride-hailing subsidy strategies to market competition, improving order acquisition while respecting budget constraints.

Contribution

It presents a novel RL-based approach with fast adaptation and budget management, along with RideGym, a dedicated simulation environment for benchmarking strategies.

Findings

FCA-RL outperforms baseline methods in diverse market scenarios.

The approach effectively adapts to dynamic competitor pricing.

RideGym enables comprehensive strategy evaluation.

Abstract

The proliferation of ride-hailing aggregator platforms presents significant growth opportunities for ride-service providers by increasing order volume and gross merchandise value (GMV). On most ride-hailing aggregator platforms, service providers that offer lower fares are ranked higher in listings and, consequently, are more likely to be selected by passengers. This competitive ranking mechanism creates a strong incentive for service providers to adopt coupon strategies that lower prices to secure a greater number of orders, as order volume directly influences their long-term viability and sustainability. Thus, designing an effective coupon strategy that can dynamically adapt to market fluctuations while optimizing order acquisition under budget constraints is a critical research challenge. However, existing studies in this area remain scarce. To bridge this gap, we propose FCA-RL, a novel reinforcement learning-based subsidy strategy framework designed to rapidly adapt to competitors' pricing adjustments. Our approach integrates two key techniques: Fast Competition Adaptation (FCA), which enables swift responses to dynamic price changes, and Reinforced Lagrangian Adjustment (RLA), which ensures adherence to budget constraints while optimizing coupon decisions on new price landscape. Furthermore, we introduce RideGym, the first dedicated simulation environment tailored for ride-hailing aggregators, facilitating comprehensive evaluation and benchmarking of different pricing strategies without compromising real-world operational efficiency. Experimental results demonstrate that our proposed method consistently outperforms baseline approaches across diverse market conditions, highlighting its effectiveness in subsidy optimization for ride-hailing service providers.