On-demand EV Charging via Online Ride-Hailing Platform: Economic Equilibrium,

Infrastructure Planning, and Regulatory Incentives

Abstract

This study proposes a novel business model for on-demand electric vehicle (EV) charging services through an online ride-hailing
platform, aiming to address the critical barrier of charging infrastructure accessibility in urban areas. By leveraging existing
ride-hailing platforms, the model connects EV owners with ride-hailing platform who transport portable charger to their vehicles,
offering a convenient and efficient solution to range anxiety. The research investigates the economic equilibrium, infrastructure
planning, and regulatory incentives necessary for the successful implementation of this model. Through a comprehensive analysis,
including a mathematical model for the on-demand charging market, the study explores how optimal charging infrastructure
planning, and a proposed regulatory policy can enhance market outcomes, facilitating EV adoption and promoting sustainable
energy use. The findings of this research contribute to the academic discourse on EV adoption, charging infrastructure, and the
role of technology in facilitating sustainable energy transitions, providing valuable insights for policy makers and industry
stakeholders.

keywords: on-demand charging service, ride-hailing platform, range anxiety, economic equilibrium, infrastructure
planning, regulatory incentives

1 Introduction
The global shift towards renewable energy sources has emerged as a critical solution to the pressing need for sustainable energy
[1], with transportation being a pivotal sector for its adoption. Numerous nations, including Indonesia, have set ambitious targets
to phase out petroleum-based transportation by the middle of the twenty-first century, marking a significant shift towards e-
mobility [2]. This transition is driven by environmental concerns and the recognition of renewable energy's role in mitigating
climate change and promoting sustainable development [3]. In Indonesia, the government has implemented policies and
regulations to support the adoption of renewable energy [3], including electric vehicles (EVs), as part of its efforts to reduce
greenhouse gas emissions and achieve sustainable development goals. Despite these efforts, the widespread acceptance of EVs
has been hindered by the lack of infrastructure for charging, posing a significant challenge [4-11].

Indonesia tends to be relevant in our research because of its financial prominence; the nation has the biggest economy in Southeast
Asia as well as the eighteenth largest in the entire globe. The nation is also host for one of the region's rising markets for capital,
which keeps drawing international investors from all over the globe. The existing business model of EV charging globally and in
Indonesia is characterized by significant investment in charging infrastructure, focusing on both public and private charging
solutions. Globally, there has been a substantial increase in the number of public charging points, with over 2.7 million installed
by the end of 2022, reflecting a 55% increase from the previous year [12]. This growth is driven by the need to provide convenience
and accessibility comparable to conventional fuelling stations, especially in dense urban areas where home charging is limited
[13]. However, the optimal ratio of EVs per charger varies based on local conditions and driver needs, with some markets
experiencing a higher ratio due to the availability of home charging options [14].

Conventional charging services, often tied to specific locations like home or work, offer predictability and consistency, appealing
for users with stable charging needs. However, they lack the flexibility and convenience that on-demand services provide,
especially for users who need to charge their EVs at unpredictable times or locations. On-demand charging services, such as those
offered by companies like NIO Corporation [15] and Sparkcharge, offer the ability to request charging services as needed, bridging
the gap between EV owners and charging infrastructure through third-party platforms [16]. This model has been gaining traction
due to its ability to address immediate charging needs without the need for a pre-existing charging station, making it particularly
appealing for users in urban areas with limited public charging infrastructure.

From a business standpoint, on-demand services offer a more flexible revenue stream that can adapt to changing customer needs
and preferences. This flexibility allows companies to optimize their operations and investments based on real-time demand,
potentially leading to cost savings and increased efficiency [17]. From an energy perspective, on-demand charging can help to
balance the load on the electric grid by allowing users to charge their EVs during off-peak hours, reducing the strain on the grid
and potentially lowering energy costs for users [17].

In Indonesia, the on-demand business sector, particularly in ride-hailing, package delivery, and food delivery services, has
flourished, leveraging digital technologies to offer immediate access to services based on immediate need. This mirrors the
principles of on-demand service provision, which have been successful in these sectors [18]. However, the on-demand electric
vehicle (EV) charging sector remains largely untapped, with the existing infrastructure for EV charging in Indonesia being
insufficient to meet the demand. The limited number of public charging stations compared to the demand for EVs has led to range
anxiety among potential EV owners, posing a significant barrier to the adoption of EVs in the country [19].

This study aims to explore how the principles of on-demand service provision, as exemplified by the successful on-demand
business practices in Indonesia, can be applied to address the specific challenges faced by the EV industry. This study seeks to
provide insights into how these broader principles can be harnessed to support the spread of EV adoption in Indonesia [18].

One proposal to address these challenges involves the development of a new hail-railing platform specifically designed for on-
demand EV charging services. This platform would serve as a bridge between EV owners and charging infrastructure, allowing
users to request charging services as needed. The importance of such a platform lies in its potential to significantly reduce range
anxiety by providing immediate access to charging solutions, thereby facilitating the wider adoption of EVs in Indonesia. By
leveraging digital technologies and innovative business models, this platform could help to overcome the current limitations of the
public charging infrastructure and contribute to the growth of the EV market in Indonesia [18].

The remaining sections of this work are organised as follows. Section 2 includes a quick overview of the suggested model for
business as well as some general notes. Section 3 develops a theoretical framework for the on-demand charge business. Section 4
explores how the charge development of infrastructure will influence the outcomes of the market. Section 5 describes and validates
a prospective policy of regulation for the suggested model of business. Section 6 includes a sensitivity study to determine the
resilience of financial discoveries. Finally, Section 7 summarises the significant results from the present investigation and suggests
potential avenues for further research.

2 Literature Review
2.1 Business Model Overview

The on-demand charging service business model involves several key stakeholders, including platforms like GO-JEK, GRAB, and
MAXIM in Indonesia, EV users, transporters, and charging infrastructure. Transporters bring portable and mobile chargers to EVs
at appointment points, alongside their regular services (ride-hailing, food, and package deliveries). The chargers are recharged at
charging point stations when necessary and returned to the transporters. This model is illustrated in in Fig. 1.
 Fig. 1. Illustration for on-demand charging service business model

In the valet system, a transporter picks up a low-battery EV and delivers it to the nearest charging point. The cycle continues until
the battery is fully recharged, at which point another transporter returns the EV to the user. The system profits from the difference
between service costs and transporter pay. Transporters are compensated per delivery [20]. In contrast, the on-demand charging
service charges an extra fee for the charging service, with transporters bringing the charging system to the user's location.

Public charging point stations are primarily operated by governmental organizations, such as PT PLN (Persero) in Indonesia, and
some private companies. These stations are considered external, and the valet charging service system charges an additional fee
for transporting the car [20]. Similarly, the on-demand charging service platform must invest in portable and mobile charger
infrastructure, which is transported by drivers for an extra fee.

During the valet charging service process, carrying dead batteries to charging point stations and returning completely recharged
EVs to clients were two separate service routes. There is a claim that two distinct transporters might deliver to the same customer.
Because EV trips in and out are unpredictable, it is impractical for carriers to stand around the charging point stations up until the
charging process is finished. Flexible dispatch of transporters to accommodate incoming clients is advantageous to the platform
itself and the transporters [20]. Meanwhile, we argue that the time efficiency is the main competitive advantage of the on-demand
charging service deployed by established ride-hailing platform or even new company one. Even more, we argue that during the
peak hour, traffic jam or in rural areas where charging point stations is limited and far, this service will be more convenient and
preferable. In parallel, driver can always check the battery capacity, and charge it to any charging point with energy transaction
fare in vacant time while conducting the other service as usual (ride-hailing, food, or package delivery). Alternatively, the on-
demand charging platform could invest charging warehouse for multiple portable battery that will be distributed to all drivers as
needed, and the driver will recharge them back when fully drained.

There may be a backlog at the charging point stations for the valet charging system. In order to free transporters to avoid the
lengthy line, it is argued that every recharging point ought to have a designated controller to oversee the EVs that are queuing [21].
Meanwhile, in the on-demand charging service, the queue mechanism most likely would not happen often, considering the driver
carry their own portable charger and battery along with them. But it is outside our research scope. Overall, despite the fact that the
corporation is reluctant to build new charging facilities, EV acceptance might rise since such a method can ease customers' worries
regarding the scarcity of charging point stations around [15].

2.2 Theoretical Background on Charging Risk

Perceived charging risk, often linked to 'range anxiety', plays a pivotal role in the adoption and use of emerging technologies like
electric vehicles (EVs). Range anxiety, characterized by concerns about the limited battery capacity and the fear of draining battery
power before reaching the intended location, is identified as a significant barrier to widespread EV use [4-11]. Research also
highlights the psychological hurdle for users residing in rental properties or lacking a place to charge, indicating an absence of
infrastructure [22].

Range anxiety is rooted in the storage restriction of EV batteries, the absence of recharging facilities, and the inconveniences
associated with finding a charging service during a journey [5, 23-26]. Perceived risk, initially discussed in psychology studies,
refers to the anticipated unfavorable effects that customers believe will occur from using a particular commodity or service [27].
Consumers' decisions and actions in support of EV adoption, such as charging, are influenced by perceived risk in addition to
beneficial effects. Users carefully weigh the advantages and disadvantages before deciding on a course of action to discover the
best option [28].

To reduce perceived risk by lowering range anxiety among consumers, several new businesses in the EV manufacturing sector are
continuously improving the size of their battery packs, speeding up the rate at which cells charge, and growing the amount of
charging infrastructure. Range anxiety thus serves as a reliable indicator of customers' perceived risk [29].

3 Research Design
The process will be:

• We will suggest an innovative company concept for on-demand EV charging via a ride-hailing platform, allowing urban
dwellers without home electrical outlets to start using EVs and refuel them using this business without too much hassle.
• We will develop an equation to describe the interactions between players in the on-demand charge sector. The framework
contains a queuing structure that explains the interaction dynamics between EVs, ride hauliers, platforms and charging
points, as well as an economical equilibrium simulation that takes into account the motivations of various market actors.
The formulation will be:
o 2.2.1 Queuing network
▪ 2.2.1.1 Delivery queue
▪ 2.2.1.2 Charging queue
o 2.2.2. Market Equilibrium
▪ 2.2.2.1 Customer incentives
▪ 2.2.2.2 Courier incentives
▪ 2.2.2.3 Platform Decisions
o 2.2.2.4 Solution Properties
 • We will then study the charging infrastructure development using the recommended business model.
• We will investigate a potential regulatory approach that imposes a fee on the platform's owner for providing each client
and spends the proceeds in public charging infrastructure.

Timeline

Semester 1 2 1 2 1 2
No. Research Stage
Year n n n+1 n+1 n+2 n+2
1 Research Proposal
2 PhD Confirmation
3 Writing: Introduction
4 Writing: Industrial Perspective
5 Writing: Literature Review
6 Writing: Methodology
7 Data Collection
8 Data Analysis
9 Writing: Mathematical Model, Formulation
10 Writing: Result, Analysis & Discussion
11 Writing: Conclusion and Implication
12 Finalisation

4 Result and Analysis

4.1 Charging Infrastructure Planning
investigates how charging infrastructure planning will affect the market outcome

• Numerical examples
• Analysis

4.2 Regulation
• Introduces and verifies a potential regulatory policy for the proposed business model, how it will affect EV policy and
industry ecosystem in Indonesia, as PT. PLN (Persero) also as the only one electrical company as a big player
• Proposal of a regulatory policy that levies a tax on the platform for serving each customer, with the revenue invested in
public charging infrastructure.
• Analysis of the policy's impact on EV adoption and the broader energy sector.

4.3 Sensitivity Analysis

Examination of the robustness of the economic insights through sensitivity analysis.

5 Conclusion
Discussion of key findings and potential directions for future research.

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