INESC TEC is developing an algorithm to optimise car sharing in Portugal

In 2017, almost 8 million people worldwide used car sharing as a means of transportation. Studies indicate that this number will increase five times by 2025[1]. In Portugal, there are three companies providing this service, all of them headquartered in Lisbon; they comprehend a fleet of 400 vehicles, which, compared to other European cities, represents a relatively low offer.

One of the reasons why the business is still not attractive enough for companies relates to issues with fleet management (size, maintenance or location, for instance) and the price of services.  The project “Smart inter(urban) shared mobility systems: Siu-SMS”, developed by INESC TEC’s Centre for Industrial Engineering and Management (CEGI) focuses on this model of urban mobility, in order to develop new ways to optimise the offer – according to the companies’ resources – but also the demand, following the users’ needs.

The main goal is to integrate pricing and fleet management decisions in a realistic scenario of car sharing services. “For instance, our algorithm can use the dynamic approach of price setting, in order to reduce the costs of relocating a vehicle i.e. the operational costs of moving vehicles from the places they were parked to other areas, in order to balance the car sharing system. Thus, the proposed algorithm can reduce operating costs and increase the use of vehicles, which significantly increases the profit of companies, while distributing the vehicles among the places that matter the most”, says Beatriz Oliveira, researcher at CEGI.

The algorithms developed will be based on mathematical and decomposition techniques, demand modelling and users’ behaviour, as well as scenario simulation tools to address with uncertainty.

“According to recent studies in the city of Lisbon[2], the use of dynamic prices in this market – prices that change according to demand or competitiveness – has shown that this method can increase the daily profit of car sharing companies up to 6 times, even with a smaller fleet. Therefore, the new algorithm that we are developing is expected to have a significant impact, not only on companies and their viability, but also on the environmental dimension of mobility”, states Masoud Golalikhani, researcher at CEGI and member of the project’s team, together with Maria Antónia Carravilla (CEGI).

After the development of the algorithm, the next step of the project will be the integration of these systems in other transport models, such as intermodal means of transportation.

The Siu-SMS project is funded by the ERDF (€220.000) through the Competitiveness and Internationalisation OP – COMPETE 2020 and Portugal 2020. The main partner is the University of Coimbra and the project is expected to end in 2021.

More information about the project at https://sites.google.com/view/siu-sms/home

How does car sharing work?

Car sharing consists of renting a car (without a driver) for shorter periods, by registering on digital platforms and using a mobile app to locate, access and use the vehicles. Car sharing companies distribute their cars in different areas of a city, within a certain perimeter, and then users can register to use them. In the most flexible systems, once the destination is reached, the users can simply park the car, since they’re not required to return it to the place of origin.

This concept, focused on urban mobility, is an attempt to reduce the environmental impact of passenger transportation, thus representing a real alternative to car ownership. “Thanks to a greater awareness of climate change and the increasing uncertainty about fuel prices, car sharing systems are likely to attract even more attention in the upcoming years”, says Beatriz Oliveira.

The researchers mentioned in this news piece are associated with UP-FEUP and INESC TEC.

[1] Study by consultant Frost & Sullivan.

[2] Jorge, D., Molnar, G., & de Almeida Correia, G. H, 2015.

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