What My Research Is All About

Dennis H. Proksch presenting at INFORMS 2019

How I became an Operations Researcher

After finishing my master’s degree, I wanted to continue to work scientifically. Not only that, I wanted to go as analytical as possible because number crunching is what I adore. So, I applied at the chair of business analytics and management science of my university; since January 2017, I belong to their externals. The field of our research is commonly named as well as operations research.

About Shared Mobility Systems

My research subject are Shared Mobility Systems (SMS). Probably, most know or have already one. The most famous one is likely ShareNow, which emerged from a fusion between Car2Go (aka Mercedes) and DriveNow (aka BMW and Sixt).

Though, if you have never heard of SMS, you can imagine them like a highly flexible car rental. Within a city, a SMS allows you to rent a vehicle of their fleet at any time, at any place. You usually only pay a price per minute of use.

Apart from DriveNow, there are several other providers and, moreover, kinds of SMS. Some SMS rent bicycles (like Velib, oBike, or Uber Bike). Others rent scooters. Some allow their users to do almost anything with their vehicles. Others are very restrictive on their use and pricing. However, most of them suffer from one problem.

The Problem I Try to Solve

The one problem they all have is this: they suffer from really low revenues. It is that bad, that numerous SMS either chose or were forced to close their business. To give you a hint, even a well established SMS with more than 100 scooters in one of Europeans capitals will make less than 100,000 EUR a year.

Sad, isn’t it? Now we have a technology – SMS – which reduces CO2 consumption, helps the poor, and frees up space in cities. But, no one will offer this technology, because it is not worthwhile using it, yet.

This is what I and others research: how can we make SMS more profitable? While there are many different levers to drive profits, I focus on the price per minute. In detail, I try to find prices per minutes so that the revenue goes up.

As you can imagine, finding the best price is a daunting task. You could set prices based on time. You could vary them based on location. You could combine those two factors. You could furthermore distinguish prices based on how long a user rents a vehicle. Or, you could change the price depending on the itinerary of the customers. Options are endless.

My Technology Stack

I first tried modeling and solving this challenge with a “classic” mathematical model. I implemented this in the Python, Pyomo, and GLPK. I failed horribly. The takes way too long to compute, even for commercial solvers like Gurobi and a hardcore server with 224 cores. Been there, done that. By the way, this summarises two years of research.

Thus, I opted for a simulation approach. VoilĂ , this is where operations research meets machine. research. I am stil using Python, but this time to write a simulation of an SMS. Then, I test out different pricing strategies in this simulation. As I have laid out, there are myriads of possibilities to set prices – so I apply methods from machine learning to find the right prices (a lot) faster.

Lastly, you may wonder, why Python? The reason is historical. Before I was doing all my work in Python, I had been working in R and Clojure for a long time. Since there were no real optimisation libraries available for neither R nor Clojure, I went over to the Python club. Since then I have grown fond of Python and even Object Oriented Programming. Still, I miss the days of writing a concise chain of piped functions and working on only a single type of data structure.

Indeed, for visualisations I still use R, especially ggplot2. I have to admit, I never really looked into the Python equivalent, into matplotlib. Saving my files as CSV or Sqlite and then analysing them in R is just so much more comfortable to me. Apart from that, I prefer the style of ggplot2.

When Will It All End?

My hope is that by the end of 2024 I will have finished all the writing and hand in my dissertation. But, life is a miracle. There are no guarantees. When I started out in 2017, I thought that by now I would already have two publications. Life has been a rollercoaster both professionally and in private – so I learned to not stress myself. I try to work between seven and ten hours per week while being as effective as possible. There is not much more I can do, frankly.