Application Of Operations Research In Cab Aggregator Route Assignments.pptx

ApplicationOf OperationsResearchIn Cab
AggregatorRoute Assignments
Submitted by:
Disha Kanojiya(059)

Transportation industry in India has transformed over the years in terms of
infrastructure, and preferences of consumers. In fact, at present, it is one
of the fastest developing urban infrastructures in India. According to a
report published by IBEF, ‘India has the 2nd largest road network in the
world that spans a total of 4.87 million kilometers and Indian roads
facilitate the transport of over 60 percent of all goods and 85 percent of
total passenger traffic’. The IBEF report further states that the Indian
government has developed a seven-phase program called the ‘National
Highway Development Project (NHDP)’ assigned with the National
Highways Authority of India (NHAI), for development of National
Highways across the country.
Overview

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The road transportation segment in India is now being disrupted by several on-
demand cab aggregators and commuting services that provide quick, easy, and
affordable transport options to customers based on their individual requirements.
The organized taxi sector in India grew exponentially as it was funded by the big
investors. According to a survey by TechSi Research Indian taxi market values at
around $6.4 billion and is forecasted to grow at a CAGR of 13.7% during 2017-
2022 reaching $14.3 billion.
This increase in demand of taxis can be attributed to a lot many factors such as
increasing disposable income of consumers, changing the lifestyle of travelers,
the growth of urban population, high traffic on other public transportations,
mostly in Tier-I and Tier-II cities, et cetera.

INTRODUCTION
◂ Operational research (or) is an analytical method of troubleshooting and decision-making which is useful in managing
organizations. In operational research, problems are divided into basic components and then resolved in the steps
defined by mathematical analysis. Uber Technologies Inc. A peer-to-peer ridesharing, taxicab, food distribution,
bicycle-sharing, and transport network company (headquartered in San Francisco, California) with operations in 785
metropolitan areas worldwide (operating in the form of recovery) TNC. Its platforms can be accessed through its
websites and mobile apps.
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OLA
Ola Cabs (styled as OLA), is an Indian origin online transport network company developed by ANI Technologies
Private. Ltd. By April 2017, the value of the Ola was $3 billion. Ola Cabs was founded on December 3, 2010, in
Mumbai as an online cab aggregator, and now it is located in Bangalore. By 2018, the company has expanded
into 169 cities network of more than 1,000,000 vehicles. In November 2014, Ola got a variety to include an auto
rickshaw on a trial basis in Bangalore. After the testing phase, Ola Auto expanded from December 2014 to other
cities like Delhi, Cuttack, Pune, Chennai, Hyderabad, and Kolkata. The lowest reciprocal option is available for
Rs. 8 per kg and Rs. 35 and the base price of Ola Mini is for the rent of Rs. 12 / km and Rs. 49 (for rates in Pune
city). Customer experience - Recover hands down the ways in which they treat their riders are far from light years
compared to hail.
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uber has been prominent in the shared economy, so as a result changes in industries are called Uberisation. Renters have been
quoted as saying that they will pay before the ride request. Uber uses dynamic pricing model; Prices vary by estimated time
and distance, depending on the time of the day and the time of the ride, depending on the supply and demand for the ride. At
the end of the ride, the rider is paid on the pre- selected preference, which can be Google, file, Google Pay, Apple Pay, cash, or
credit card in India, Airtel Mobile Wallet Or integrated payment interface. By March 2018, Uber's market share in the United
States was 73% as per the second measure, according to an analytics platform, based on credit card data. Uber calculates its
market share between 70% and 72% internally in the United States. In March 2018, there were 41.8 million users in the United
States of America.
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UBER

Benefits of recovery And rehabilitation in India:
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◂ Low price. Usually, the cab prices are equivalent to normal taxi prices which makes it the first
choice of the consumer.
◂ Easy travel. When you are paying almost the same amount, why not travel in an air-conditioned
cab.
◂ Option. Want to travel in style, book the SUV or Ola Lux? For those who are not aware of Ola Lux,
you can book BMW, Mercedes, Jaguar or any such luxury car for your trip. Book alone, a book on
a budget, lower pool or wet stock book. It is sure that the shots are cheap after your black and
yellow cab.
◂ Revenue for Government. Everything is computerized. Billing, payment, etc. So, you must pay
service tax at any cost.
◂ Employment Opportunities There are many people who are able to earn their side income by just
applying a driver to run their car.

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Basis OLA Uber
Launch 2010 2009 (2013 in India)
Valuation 3 billion $ 62.5 billion $
Fundraising 1.75 billion $ 11.56 billion $
Key investors Softbank, Tiger global, DST Benchmark, Baidu, SaudiArabia's public investment fund
Tech platform Application Application
Presence in number of cities in India 110 29
Number of vehicles on the platform in India 550,000 350,000
Market share in India Around 65% Around 35%
Number of employees in India 8000+ 200+

The supply of taxis wasn’t able to meet the high demand, hence shortage implying towards the need for a breakthrough in
this market and the opportunities left unutilized. All these factors lead to the transformation of this market and allowing
taxi aggregators such as OLA and UBER. The taxi market in India was highly fragmented and unorganized, which
comprised of individual car owners and small-scale agencies operating in different cities around the country. The organized
Indian Taxi market can be classified into three major segments: Owners- Easy Cabs, MERU
Affliators- Savaari, taxiGuide.in Aggregators- OLA, UBER
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Process Of Transportation
Services Logistics

Basic Process
1. Customer
2. Cab Aggregators (Ola, Uber)
3. Cab
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TheBasicProcessOf The Service
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Basic Process
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Process(Taking Ola As An Example)
Step 1
Need to install an Ola app on
your mobile phone.
Step 2
Create an account using a
phone number or email.
Step 3
One time password (OTP) will
be sent to your number.
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Step 4
To start a ride enter your
pickup location
Step 5
Enter your drop location.
Step 6
Need to select a cab

Process(Taking Ola As An Example)
Step 7
Two options to choose from:
Ride later and Ride now. If
you want to book an advance
Ola ride, you need to tap the
'Ride later' option.
.
Step 8
Click on 'Ride now' to book
the ride.
Step 9
The computer will connect the
customer with a suitable
driver.
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Step 10
If the driver accepts the ride
then the ride is booked.
Step 11
Instantly get confirmation of
the driver and its details on
your mobile phone.
Step 12
In a few seconds user will see
the en-route option on the
map. Through it, user can
track the driver.

Process (Taking Ola As An Example)
Step 13
After reaching the
destination driver will
press complete the ride
button.
.
Step 14
The rider will pay the
driver through his
preferd method.
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Use Of Assignment Model
In Cab Aggregate

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USE OF ASSIGNMENT MODEL IN CAB
AGGREGATE
 Operations of Ola and Uber majorly is to allocate and dispatch their respective fleets in a
way to the incoming request from customers that allows them to make maximum profit.
 On the basis of the above case, we have developed a hypothetical case having the
following assumption:
a) The cab company has a total fleet of 3 vehicles .
b) Total ride requests at a particular point of time by the customers is 3.
c) Total Cost per ride = Distance Travelled x Cost/Km + Total Ride Duration x Time
Rate

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ABOUT THE CASE
 The following case deals with a situation where 3 riders at different places in
the city have requested cabs and the company now must assign each available
cab to a rider in a manner which minimizes cost of each ride to the company.
The riders are located at different locations in the city and have made a request
for a cab to the company. The cost per ride incurred by each cab varies
depending on the location of the rider and the destination and total cost of each
route is denoted as C1, C2, and C3 etc.
The following matrix depicts the problem at hand
VehiclesAvailable/Rider
Requests
Location1/
Rider1
Location2/
Rider2
Location3/Rider3
Cab 1 C1 C2 C3
Cab 2 C4 C5 C6
Cab 3
Cab 4

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 Steps in solving the Assignment Problem :
a) The first step is to balance the problem. An assignment problem is said to be balanced when the number of rows
is equal to the number of columns. In this case the number of cabs available with the company should be equal to
the number of trip requests. If the problem is not balanced, it is made balanced by as many dummy rows/columns.
b) The second step involves getting zeroes in every row of the matrix (Finding the Row Minima). For this, the least
value in every row is subtracted from each row element. In the above problem, taking the case of Cab 1, the row
shows the cost per ride incurred if Cab 1 transports Rider 1 i.e., C1, cost if Cab 1 transports Rider 2 i.e., C2 and so
on. Thus, the least cost incurred is taken and subtracted from all the other costs in the row. This step is repeated
for all rows.
c) The third step involves getting zeroes in each column as well, with the same method as above being followed.
With respect to the case, costs would be analysed with respect to one specific rider availing the ride through all
the potential cabs. Thus, when solving for Column Minima, cost per ride if the Rider travels through Cab 1,Cab 2
and Cab 3 respectively would be analysed.

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d) After obtaining the zeroes, allocation is made to each row which will have a
single zero. All other zeroes in the column will be cancelled. This step is
repeated for each row till all the rows have a single allocation.
e) However, there may arise a situation when the number of allocations is not equal
to the order of the Assignment problem, which indicates that the solution is not
optimal. In order to make the solution optimal, the tick method can be used to
optimize the problem
 After solving the Assignment Problem, the following matrix will be achieved.
The highlighted box shows the assignment of each cab to a specific location,
which ensures that the total cost is minimized during the daily operations of the
company.
VehiclesAvailable/Rider
Requests
Location1/
Rider1
Location2/
Rider2
Location3/Rider3
Cab 1 C1 C2 C3
Cab 2 C4 C5 C6
Cab 3 C7 C8 C9

OR In Taxi
Aggregator Industry

Operationanalytics:UBERandOLAlogisticsOptimization
Operations of Ola and Uber majorly is to allocate and dispatch their respective fleets in a way to the incoming request from
customers that allows them to make maximum profit. Operations research is the most useful approach to curb this problem as it
calculates the most optimal way to allocate the limited sources, hence the methodology and approach of operations research are
widely applied in this taxi industry. In today’s on-demand economy where there’s logistics of people, food, courier packages et
cetera taking place, the allocation must be done in the most optimal way. The status quo has been abysmal in this industry.
Ola and Uber with their route optimization are reigning in the taxi industry, developments are done in operations research since the
Second World War has allowed these service providers to operate the entire fleet as one centralized system. The system gathers the data
and delivers the route with multiple pickups and drop-offs intertwined. OR is widely applied in the taxi market of India as it efficiently
curbs the problems of this industry in our country.
Purpose– The purpose of this paper is to explore the business dynamics of a rising ride-hailing service industry through this study
and foster understanding of hypothetical feedback effects within the broader system.
Design/methodology/approach – The research adopts the dynamic performance management framework with a simulation-based
methodology for developing a dynamic case interpretation of the specific type of business complexity.
Findings– Scenario analysis shows that changes in the commission percentage for drivers, and cutting prices for customers (car
hailers) by competitors have significant impacts on the car-hailing industry
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With the detailed review and know-how of the prevailing Cab aggregation enterprise, contemporary state
of affairs and troubles, listed below are few of the recommendations that may be considered for
implementation:
To facilitate the customers who are not but used to the technology the usage of clever phones and
cell net, if they may be provided an alternative, that segment of the clients are not lost.
Bringing in most drivers into the community giving them the right schooling on how to behave with
the customer’s right from receiving them at the same time as they board will assist in building the
brand loyalty.
With the introduction of the Surge pricing, the affordability component is lost. Companies must
study methods like increasing the no. of kilometers served in a day to increase their sales as opposed
to trekking the prices all at once.
Introduce the idea of journey miles for dependable customers; these will attract the clients to stay at
the community for the long term.

Secondary Data Analysis
 The role operation research plays in the taxi aggregator business. Consumers now want convenience of travel as well as the cheapest mode available
when choosing a cab. From the side of the cab aggregators, they would like to assign cabs to each ride request in such a manner which minimizes time
as well maximizes profit on each ride completed. In order to understand the problem and optimize it, it is necessary to understand the cab booking
process. The users first make a request for the cab through the cab aggregator app, providing details like pick up and drop off location. The cab
aggregator, on a real time basis assigns a cab to the customer based upon factors such as vicinity to pick up location, driver discretion etc. In order to
provide maximum profit on each ride to the cab company, we have used the example of an assignment problem to allocate different cabs to different
rider requests. Various factors such as cost of travel and time taken to complete each ride have been quantified for this purpose
 For this article, the research is based on the previous data provided.
 The data is collected presents the data on the integral logistics working of Uber and Ola.
 It is based on the data collected from various sources including newspaper articles, online journals, articles, and research papers.
Factor And Derived Analysis
 In the taxi aggregator industry, the major logistics are concerned with the recruitment of people, assignment of jobs and rides to the
driver, area connectivity, and the time is taken to reach the destination and route chosen.
ANALYSIS
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OLA
OLA CABS Recently Ola signed an agreement with the Haryana Government in which they would be
providing jobs to over 35,000 people. The agreement is to ensure professional growth and skill training
of individuals. In assignment o jobs Ola is not very well optimized as according to the data collected
and upon survey, it was found out that Ola cab is not as readily and conveniently available. This is
mainly because Ola provides a wide coverage area however the availability is not compatible with
demand. The rides are decided upon the driver's discretion and the drivers are paid a part of the
earnings as a commission, however, many times the rides are overlapped due system issues. The area
expanse covered b Ola is a lot more than Uber as it is present in 110 cities however the assignment of
jobs is not very optimal, also the advertisement reach of Ola is much less as compared to Uber. Ola has
also several times been rated badly as the drivers take too long to reach the destinations and sometimes
take a longer route than necessary.
UBER
Uber India, is not as established as compared to other countries, however it is still of the
fastest growing taxi and cab service company of India. For assignment of jobs Uber only
targets the closest available driver, however, it is upon driver’s discretion whether to accept
the ride or not. The drivers are individually paid for the trip on which they earn a commission
and can complete as many as trips they like. However, systems operation of Uber in India is
still quite weak as many times the driver app crashes. Also, Uber is far less connected in
India as it is only present in 29 major cities of the country, thus decreasing its market reach
drastically. Were Ola has a market share of approx. 65% Uber only serves the remaining
35% due to its lack of connectivity in many areas. Uber is known for its quick responses and
highly skilled drivers who are well versed with the cities. Also known for is quick processing of
feedback and expected responses.
COMPANY
NO. OF
VEHICLES
% Market
Share wrt
no. of
Rides
OLA 2,00,000 49
UBER 1,50,000 35

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Surge price optimization also is a crucial factor that affects the demand and cost of the taxi aggregator
industry.

“
◂ As we can see in many cities surge pricing optimization is close, but mostly Uber has a higher rate of surge pricing due to limited cars
available. However, in Mumbai Ola has a higher surge pricing rate than Uber, this is because of the lesser area coverage
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