An Intelligent and Dynamic Pricing IoT Model to Stimulate the Use of Shared Economies in Smart Cities

There has been an increasing interest in smart cities and digital technology/information to enhance the quality of services, while reducing costs and resource consumption. Hence, the "shared economies" notion was introduced accordingly, which is a modern business concept highlighting people's preference to share/rent goods and services (e.g., space, transportation, utilities) rather than to buy and/or own them. Smart cities enabled by peer-to-peer internet capabilities - e.g., IoT technology and devices - can fuel the growth of shared economies by improving information transparency, rationalizing resource allocation, and reducing waste. This paper proposes a dynamic pricing model developed from an innovative renter reliability index, which is measured and created by IoT-enabled and real-time data. The proposed intelligent dynamic IoT model was used and tested in a real-world long-term shared economy environment (i.e., a rental space) of a smart city in New Jersey, USA. The results showed that the proposed model can significantly enhance the transparency and legitimacy of rental pricing in a shared. This paper contributes to the literature by improving the efficiency of the shared products/services, the allocation of resources, and the pricing rationalization, which ultimately stimulates the shared economy concept in smart cities. The proposed model is useful for both the providers and users of shared economy systems, particularly those of shared properties (i.e., rental spaces).