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A system manager makes dynamic pricing and dispatch control decisions in aqueueing network model motivated by ride-hailing applications. A novel featureof the model is that it incorporates travel times. Unfortunately, this rendersthe exact analysis of the problem intractable. Therefore, we study this problemin the heavy traffic regime. Under the assumptions of complete resource poolingand common travel distribution, we solve the problem in closed form byanalyzing the corresponding Bellman equation. Using this solution, we propose apolicy for the queueing system and illustrate its effectiveness in a simulationstudy.

A Queueing Model of Dynamic Pricing and Dispatch Control for Ride-Hailing Systems Incorporating Travel Times