The concepts behind thesolution of the "Market Formation Problem" Real-Time Dynamic Ridesharing on a Transit Exchange
Transit Exchange XXI Century                 What I am going to tell youWhat it isWhat it doesHow it came about (and who h...
The Six PillarsSpatio Temporal Order Matching and Fulfillment                                         Conformal     Topolo...
"                Most automobiles carry one                    person and are used for less                    than one ho...
"         A more economically rational                  approach would be to use vehicles                         more int...
First, some definitions
Carshare - A service like ZipCar.Users can use the same car, but not usually at the same time
Carpool - A service where several people get into      the same vehicle (car) at the same time. The vehicle (car) is drive...
Vanpool - A service like a carpool    but driven by a professional driver.
Taxisharing - A service where a taxi isshared between several different people     going to the same destination
Ridesharing - encompasses carpools, vanpools,       taxishares, buses, hitchhiking, etc
dynamic real-time ridesharing          The Quest Prize
Summoning a vehicle in real-time rather than e.g. week ahead          or day ahead(not trivial due to the "Market Formatio...
Real-time dynamic ridesharing has had a long and              chequered history
Variations of it have been tried continuously since the1960s by most major Universities and countless private             ...
The biggest barrier to real-time, dynamic                                                   Market Formation problemridesh...
The exchange is thus a system that, using Market Makers,enables the dynamic pricing and allocation of the “river of emptys...
http://www.flickr.com/photos/paysage_du_temps/472780837/                                      Free MarketThis can only be ...
Such an exchange exists to impartially link suppliers   of transport with those requiring transport -       whatever the m...
The exchange also serves toaggregate groups of individualswho are seeking rides to (roughly)the same destination at (rough...
Spatio-Temporal Order Matching        and Fulfillment     (if you want a juicy long phrase)
A rider can indeed choose to travel alone - (s)he will just pay              the (true) costs of the empty seats
which is what happens when you own a personalvehicle for your exclusive use in any case or you rent /                   ch...
This finally allows transport systems to adapt themselves around the needs and itineraries ofpassengers / customers / user...
With a solution to the "guaranteed ride home"problem that has plagued many dynamic rideshare                     initiatives
And also prices roadspacetime
Although initially demonstrated in 2005 - 2006 as an exclusively SMS-based system, the overall concept is to     allow any...
Congestion is a useful signal
It tells us (obviously) that a lot of  people are occupying the same    roadspace at the same time
and that there is considerable scope to further             optimise vehicle use
So what connects to a Transit Exchange ?
Applications that hail vehicles
Applications to compare the ask prices of transit                service provider
Applications to get data from ridesharing
Applications to calculate carbon use and milestravelled per user for particular times of day
Applications to compare achieved prices for transit
It is an open platform that allows any transportprovider a level playing field to compete with all                others i...
How it all came about   RAF   (1993 - 1995)   RAEng / National Grid   (1992 - 2001)   Aeronautical Engineering   (Imperial...
UK Royal Air Force
While at university I was lucky enough to indulge my passion for aircraft by    flying in an RAF University Air           ...
University of London Air Squadron
I had some idea of the general operation   of integrated     air defence systems and the way that modern        battlespac...
The key thing that separates grouping applications on a transitexchange from all other ride-sharing initiatives before it ...
As with joint operations in a modern battlespace, the marketing of the    scheme cannot be separated from the messaging an...
Year in Industry Programme      Industrial Placement 1992 - 1993Project to use day-aheadand week ahead weather predictions...
"   Central ElectricityResearch Labs startedlife as a series of huts        in Surrey
My project was to create a database ofoverhead lines conductors and theirthermal characteristics to link in withthe statis...
Using those weather predictionsin making line loading decisions     (a type of demand response balancing)
Strict thermal constraints were required toprevent the plastic creep of the power lines overtime resulting in electrical d...
As was proved in that project, rethinking andchallenging commonly held assumptionssometimes results in great solutions
An RAEng project     in 1995 called      "The Role of Computers in     Transportation Technology"NASA Space Shuttle Traine...
During an internship at Swiss Bank Corporation, in 3 weeks, Itravelled to;       New York - Atlanta - Huntsville     Miami...
Engineering Mathematics ConceptsStructural Matrices(a type of social network for forces)Genetic Algorithms(a way to "cheat...
Applied mathematics fromaeronautics + biology(wing design, complex analysis, geneticalgorithms)
This idea is to map a hard problem thatseems intractable into a form that you(or someone else) *can* solve                ...
e.g. | a 2nd Order Linear DifferentialEquations with constant coefficients
Become simple algebraic expressions once transformed by a LaplaceTransform
e.g. | Forced harmonic motion equations withdamping
Become simple electrical circuits (or vice versa)
e.g. | Finding the separation point of airflowover complex wing shapes    Used to require months and dozens of prototype w...
Start with a 2D cylinder and pretend the flow  is inviscidthen use a Kutta-Joukowksi transform to map the cylinder into th...
ERASMUS Scheme for year abroad in EuropeA ridesharing project at EcoleCentrale de Lyon using groupware
The University wanted a way to help students to get home by sharing   rides if possible (France has toll roads, high taxes...
The Internet Movie Database (database / social network of actors and films)
Whats this got to                                do with                                ridesharing?Sometime in 1990, an i...
This led to the Internet Movie Database and although there were (many) others, this onesurvived and was turned into a     ...
which was eventuallybought by Amazon in 1998
coupled with BoxOfficeMojo, it is quite amazing what "live" statistics you can pull out of this system now
You may be aware that some actors are vastly more connected     than others - even for a similar number of films
Ever played "6 degrees of Kevin Bacon" ?
Well, with IMDB you can take that several stages further
Much of what I was trying to model with both a creditcontagion system AND dynamic ridesharing (Texxi) is very similar to f...
Computers & Networking Protocols
Computers achieve so much more when they talk to                other computers
But they need some sort of "common ground" where they can         all communicate - that is called the Internet           ...
Trading & Futures ExchangesIn November 2003, I started work on a paper for a capitalstructure arbitrage hedge fund to expl...
Connectedness + ContagionTo begin with, we had to structure a lot of raw, historicalvolatility data into a "DataMart" of s...
Bookem Danno   it occurred to me that some companies would be moreconnected than others and thus would be like critical no...
In times of economic stress, where either manycompanies face similarly challenging conditions or a few very large and well...
Recent papers (since 2010) on credit contagion have nowempirically confirmed the presence of fat tails in observed lossdis...
The corollary in ridesharing is situations in which a lot of people want transport at the same certain times (rush  hour, ...
The correlations increase dramatically making finding matches   that much easier than would be apparent at first glance
and while using a ridesharing analogy, I realised that the       market for ridesharing was of the order of   $1,000bn p.a...
Yes, you got it right                        $1 TRILLION
Later in 2004 - 2006, applying further ideas fromcommerce (the Long Tail by Chris Anderson)
and some subjects from aeronautical engineering (wing design,structural matrices and genetic algorithms), RAF (battlespace...
I became confident that this problem was indeedresolvable in a real, largescale live environment.
The issue at hand is identical to the same problems thatagricultural producers experienced in commerce before theadoption ...
The attitude to ridesharing is one of risk aversion (much likehow farmers sought to minimise risk trades with buyers)
Trading will not happen if people cannot have some sortof good knowledge or guarantee of their counterparties
The same is true ridesharing: outside certain specialconditions, the matching in both space and time seems            to b...
People always say "what is the likelihood of someonedoing the exact same trip as me at the same time as me?"
It is actually quite a lot higher than many imagine.However, using a market-maker, we dont need to worry                 a...
The market-maker effectively buys the empty seats from   "producers" and holds them until it finds a buyer
Name: Ms Ying LuiWorks: Investment BankStatus: SingleRoute: Woolton - James St.Leaves Home: 6:45amSpare Seats: 3Would shar...
3 spare seats (rides) for                                       sale in a convertible for                                 ...
This actually happens anyway with buses which drive around empty
It is just that the person paying    for those empty seats is a             taxpayer
Whether that taxpayer ever uses the bus or not
We thought this was unfair - a bit like bailing    out bankers for bets that went wrong
Why not let a private entity take the risk (and reward) instead?
Ironically, the bandwidth industry also uses “transitexchanges” to link fibre carriers in locales called “peering points” ...
The Six PillarsSpatio Temporal Order Matching and Fulfillment                                         Conformal     Topolo...
The Transit Exchange is a way to get people to sharetransport resources- dynamically and in realtime -
by using an online transit marketplace to connectbuyers and sellers of whichever transport services (car, taxi, bus, limou...
It overcomes the long observed problems of marketformation issues, guaranteed ride home worries, legalconstraints about ta...
It needed ideas from the military, aeronautics ,futures exchanges, credit contagion, social networkmodelling and electrici...
And even then, in order to effect the behaviour change in a populationand keep people coming back to buy more trips,   cle...
Hence why the marketing cannot be separated from the           technology in any deployment.
Much like modern warfare requires joint operations and  the integration of financial, cultural and informationassets in co...
By coincidence Texxi also stands for"The Transit Exchange for the XXI Century"
Thank you for watching!Crane Dragon 2004 - 2012 | Transit Exchange Concept / Texxi
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The Transit Exchange Underpinnings

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What would transport look like if every single trip was priced competitively and fairly? How useful would mass transit be then? Would we need to own cars if we could buy (on-the-fly) a ride to wherever we needed to go within minutes?

This presentation describes an existing innovation - the Transit Exchange for the XXI Century or Texxi - which was invented and deployed in 2005 - 2008 in the UK which aims to combine several strands of thinking in mobile social ridesharing, congestion management, social equity and route optimisation to finally end the problem of so many failed dynamic rideshare systems.

It can connect with both taxi hailing app, carpools, vanpools, carclubs and municipal intelligent transit systems.

Eric Masaba and Matthew Burden.

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The Transit Exchange Underpinnings

  1. 1. The concepts behind thesolution of the "Market Formation Problem" Real-Time Dynamic Ridesharing on a Transit Exchange
  2. 2. Transit Exchange XXI Century What I am going to tell youWhat it isWhat it doesHow it came about (and who helped me)How it generally worksWhat problems it solvesThe future of urban transport 2015 - 2035
  3. 3. The Six PillarsSpatio Temporal Order Matching and Fulfillment Conformal TopologySocial Networks / Credit Contagion Mapping Complex Analysis / Simplex Method Futures Electricity Exchanges Markets Market Makers / Price Discovery Constraints Genetic Integrated Algorithms Battlespaces NP Hard Problems ADS-B + Link 16
  4. 4. " Most automobiles carry one person and are used for less than one hour per day"Carsharing in Europe and North America: Past, Present, and Future"- by Susan Shaheen, Daniel Sperling, and Conrad WagnerPrinted in Transportation Quarterly (Summer 1998), Vol. 52, Number 3, pp. 35 -52
  5. 5. " A more economically rational approach would be to use vehicles more intensivelyThe 7-passenger and North America: by Enterprise Rent-A-Car give the New"Carsharing in Europe vans provided Past, Present, and Future"- by Susan Shaheen, Daniel Sperling, and Conrad WagnerBraunfels group plenty of room Number 3, pp. 35commute. (US Army Photo by Tim Hipps)Printed in Transportation Quarterly (Summer 1998), Vol. 52, for their -52
  6. 6. First, some definitions
  7. 7. Carshare - A service like ZipCar.Users can use the same car, but not usually at the same time
  8. 8. Carpool - A service where several people get into the same vehicle (car) at the same time. The vehicle (car) is driven by a private (i.e. not for hire/reward) person
  9. 9. Vanpool - A service like a carpool but driven by a professional driver.
  10. 10. Taxisharing - A service where a taxi isshared between several different people going to the same destination
  11. 11. Ridesharing - encompasses carpools, vanpools, taxishares, buses, hitchhiking, etc
  12. 12. dynamic real-time ridesharing The Quest Prize
  13. 13. Summoning a vehicle in real-time rather than e.g. week ahead or day ahead(not trivial due to the "Market Formation Problem")
  14. 14. Real-time dynamic ridesharing has had a long and chequered history
  15. 15. Variations of it have been tried continuously since the1960s by most major Universities and countless private organisations
  16. 16. The biggest barrier to real-time, dynamic Market Formation problemridesharing has been the lack of a critical massof people all wanting to share transport fromthe same or similar origin to the same orsimilar destinations at the same time. The
  17. 17. The exchange is thus a system that, using Market Makers,enables the dynamic pricing and allocation of the “river of emptyseats” in all the vehicles within an urban automotive fleet within specific time windows and additionally allows buyers of those seat-rides to rate their co-riders and experiencesWhat a Transit Exchange does
  18. 18. http://www.flickr.com/photos/paysage_du_temps/472780837/ Free MarketThis can only be achieved in a free market environment within analmost fully deregulated transport environment
  19. 19. Such an exchange exists to impartially link suppliers of transport with those requiring transport - whatever the means of transportation
  20. 20. The exchange also serves toaggregate groups of individualswho are seeking rides to (roughly)the same destination at (roughly)the same time
  21. 21. Spatio-Temporal Order Matching and Fulfillment (if you want a juicy long phrase)
  22. 22. A rider can indeed choose to travel alone - (s)he will just pay the (true) costs of the empty seats
  23. 23. which is what happens when you own a personalvehicle for your exclusive use in any case or you rent / charter a vehicle
  24. 24. This finally allows transport systems to adapt themselves around the needs and itineraries ofpassengers / customers / users - not the other way around.
  25. 25. With a solution to the "guaranteed ride home"problem that has plagued many dynamic rideshare initiatives
  26. 26. And also prices roadspacetime
  27. 27. Although initially demonstrated in 2005 - 2006 as an exclusively SMS-based system, the overall concept is to allow any suitable messaging mechanism communion with the exchange
  28. 28. Congestion is a useful signal
  29. 29. It tells us (obviously) that a lot of people are occupying the same roadspace at the same time
  30. 30. and that there is considerable scope to further optimise vehicle use
  31. 31. So what connects to a Transit Exchange ?
  32. 32. Applications that hail vehicles
  33. 33. Applications to compare the ask prices of transit service provider
  34. 34. Applications to get data from ridesharing
  35. 35. Applications to calculate carbon use and milestravelled per user for particular times of day
  36. 36. Applications to compare achieved prices for transit
  37. 37. It is an open platform that allows any transportprovider a level playing field to compete with all others in a locality
  38. 38. How it all came about RAF (1993 - 1995) RAEng / National Grid (1992 - 2001) Aeronautical Engineering (Imperial College,UK & ECL,France) (1993 - 1998) IMDB / Social Networks Computers / Networking Investment Banking / Hedge Funds
  39. 39. UK Royal Air Force
  40. 40. While at university I was lucky enough to indulge my passion for aircraft by flying in an RAF University Air Squadron
  41. 41. University of London Air Squadron
  42. 42. I had some idea of the general operation of integrated air defence systems and the way that modern battlespaces are set up.
  43. 43. The key thing that separates grouping applications on a transitexchange from all other ride-sharing initiatives before it is the integration of certain operational concepts
  44. 44. As with joint operations in a modern battlespace, the marketing of the scheme cannot be separated from the messaging and grouping technology, the futures exchange ideas, the use of a databases of transit intentions, the effect of social networks (which Texxi was designed from the outset to take into account) nor the ability to represent rideshare matches as nodes in a “searchable battlespace”
  45. 45. Year in Industry Programme Industrial Placement 1992 - 1993Project to use day-aheadand week ahead weather predictions to schedule more power loading on transmission lines
  46. 46. " Central ElectricityResearch Labs startedlife as a series of huts in Surrey
  47. 47. My project was to create a database ofoverhead lines conductors and theirthermal characteristics to link in withthe statistical modelling
  48. 48. Using those weather predictionsin making line loading decisions (a type of demand response balancing)
  49. 49. Strict thermal constraints were required toprevent the plastic creep of the power lines overtime resulting in electrical discharges to ground
  50. 50. As was proved in that project, rethinking andchallenging commonly held assumptionssometimes results in great solutions
  51. 51. An RAEng project in 1995 called "The Role of Computers in Transportation Technology"NASA Space Shuttle Trainer atMarshall Space Flight Centre, Alabama
  52. 52. During an internship at Swiss Bank Corporation, in 3 weeks, Itravelled to; New York - Atlanta - Huntsville Miami - San Francisco - Los AngelesTo see;Automated highway technology(thanks Kate Bellingham)ACM SIGGRAPH 95(thanks Paul Brown, Len Breen and Daniel Brown)NASA bases(organised by the RAF, MoD and paid for by the Royal Aeronautical Society and the Royal Academy ofEngineering)
  53. 53. Engineering Mathematics ConceptsStructural Matrices(a type of social network for forces)Genetic Algorithms(a way to "cheat" hard problems by borrowing from Biology )Wing Design(How solving for a wIng shape is like figuring out the best route)Complex Analysis / Conformal Mapping(Once you map a problem to another domain, it may no longer look like a problem)
  54. 54. Applied mathematics fromaeronautics + biology(wing design, complex analysis, geneticalgorithms)
  55. 55. This idea is to map a hard problem thatseems intractable into a form that you(or someone else) *can* solve 2 75 975 x 989 16 x 17
  56. 56. e.g. | a 2nd Order Linear DifferentialEquations with constant coefficients
  57. 57. Become simple algebraic expressions once transformed by a LaplaceTransform
  58. 58. e.g. | Forced harmonic motion equations withdamping
  59. 59. Become simple electrical circuits (or vice versa)
  60. 60. e.g. | Finding the separation point of airflowover complex wing shapes Used to require months and dozens of prototype wings
  61. 61. Start with a 2D cylinder and pretend the flow is inviscidthen use a Kutta-Joukowksi transform to map the cylinder into the actual shape you want
  62. 62. ERASMUS Scheme for year abroad in EuropeA ridesharing project at EcoleCentrale de Lyon using groupware
  63. 63. The University wanted a way to help students to get home by sharing rides if possible (France has toll roads, high taxes and petrol is expensive there)
  64. 64. The Internet Movie Database (database / social network of actors and films)
  65. 65. Whats this got to do with ridesharing?Sometime in 1990, an intrepid group of enthusiastsdecided to make a comprehensive database of every film with all its actors and crew listed
  66. 66. This led to the Internet Movie Database and although there were (many) others, this onesurvived and was turned into a company
  67. 67. which was eventuallybought by Amazon in 1998
  68. 68. coupled with BoxOfficeMojo, it is quite amazing what "live" statistics you can pull out of this system now
  69. 69. You may be aware that some actors are vastly more connected than others - even for a similar number of films
  70. 70. Ever played "6 degrees of Kevin Bacon" ?
  71. 71. Well, with IMDB you can take that several stages further
  72. 72. Much of what I was trying to model with both a creditcontagion system AND dynamic ridesharing (Texxi) is very similar to finding actors who have acted in the same films or that have a connection in common
  73. 73. Computers & Networking Protocols
  74. 74. Computers achieve so much more when they talk to other computers
  75. 75. But they need some sort of "common ground" where they can all communicate - that is called the Internet (a network made up of many joined peering points)
  76. 76. Trading & Futures ExchangesIn November 2003, I started work on a paper for a capitalstructure arbitrage hedge fund to explain the effect on CDSprices of credit contagion between companies
  77. 77. Connectedness + ContagionTo begin with, we had to structure a lot of raw, historicalvolatility data into a "DataMart" of sorts, which allowedus to find patterns within a dataset
  78. 78. Bookem Danno it occurred to me that some companies would be moreconnected than others and thus would be like critical nodes in the case of a bankruptcy
  79. 79. In times of economic stress, where either manycompanies face similarly challenging conditions or a few very large and well connected companies are at risk of failing, fatter tails in loss distributions of large loan portfolios are observed.
  80. 80. Recent papers (since 2010) on credit contagion have nowempirically confirmed the presence of fat tails in observed lossdistributions due to credit defaults from the correlative aspect of companies in a trading space
  81. 81. The corollary in ridesharing is situations in which a lot of people want transport at the same certain times (rush hour, concert or sports events, school start and end times, industrial action and inclement weather)
  82. 82. The correlations increase dramatically making finding matches that much easier than would be apparent at first glance
  83. 83. and while using a ridesharing analogy, I realised that the market for ridesharing was of the order of $1,000bn p.a. in the USA + EU5 countries alone.
  84. 84. Yes, you got it right $1 TRILLION
  85. 85. Later in 2004 - 2006, applying further ideas fromcommerce (the Long Tail by Chris Anderson)
  86. 86. and some subjects from aeronautical engineering (wing design,structural matrices and genetic algorithms), RAF (battlespaces and integrated air defence)
  87. 87. I became confident that this problem was indeedresolvable in a real, largescale live environment.
  88. 88. The issue at hand is identical to the same problems thatagricultural producers experienced in commerce before theadoption of “futures exchanges”
  89. 89. The attitude to ridesharing is one of risk aversion (much likehow farmers sought to minimise risk trades with buyers)
  90. 90. Trading will not happen if people cannot have some sortof good knowledge or guarantee of their counterparties
  91. 91. The same is true ridesharing: outside certain specialconditions, the matching in both space and time seems to be unlikely if not impossible
  92. 92. People always say "what is the likelihood of someonedoing the exact same trip as me at the same time as me?"
  93. 93. It is actually quite a lot higher than many imagine.However, using a market-maker, we dont need to worry about that to begin with
  94. 94. The market-maker effectively buys the empty seats from "producers" and holds them until it finds a buyer
  95. 95. Name: Ms Ying LuiWorks: Investment BankStatus: SingleRoute: Woolton - James St.Leaves Home: 6:45amSpare Seats: 3Would share with:Professional Women.
  96. 96. 3 spare seats (rides) for sale in a convertible for professional women onlyTo give the sellers a guarantee that someone will buy atsome price and to give customers confidence that they can always get a ride at an advertised price
  97. 97. This actually happens anyway with buses which drive around empty
  98. 98. It is just that the person paying for those empty seats is a taxpayer
  99. 99. Whether that taxpayer ever uses the bus or not
  100. 100. We thought this was unfair - a bit like bailing out bankers for bets that went wrong
  101. 101. Why not let a private entity take the risk (and reward) instead?
  102. 102. Ironically, the bandwidth industry also uses “transitexchanges” to link fibre carriers in locales called “peering points” - think of these as bus stations for data packets
  103. 103. The Six PillarsSpatio Temporal Order Matching and Fulfillment Conformal TopologySocial Networks / Credit Contagion Mapping Complex Analysis / Simplex Method Futures Electricity Exchanges Markets Market Makers / Price Discovery Constraints Genetic Integrated Algorithms Battlespaces NP Hard Problems ADS-B + Link 16
  104. 104. The Transit Exchange is a way to get people to sharetransport resources- dynamically and in realtime -
  105. 105. by using an online transit marketplace to connectbuyers and sellers of whichever transport services (car, taxi, bus, limousine, private jet, ferry, dollar van or train)
  106. 106. It overcomes the long observed problems of marketformation issues, guaranteed ride home worries, legalconstraints about taxi booking and accessibility (beingagnostic to the type of device used to hail a ridematch / summon a vehicle)
  107. 107. It needed ideas from the military, aeronautics ,futures exchanges, credit contagion, social networkmodelling and electricity research to be fully realised
  108. 108. And even then, in order to effect the behaviour change in a populationand keep people coming back to buy more trips, clever and repeatedintegrated marketing is vital
  109. 109. Hence why the marketing cannot be separated from the technology in any deployment.
  110. 110. Much like modern warfare requires joint operations and the integration of financial, cultural and informationassets in concert with combatants and their machines on the battlefield.
  111. 111. By coincidence Texxi also stands for"The Transit Exchange for the XXI Century"
  112. 112. Thank you for watching!Crane Dragon 2004 - 2012 | Transit Exchange Concept / Texxi
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