Abstract: A method and a system for allocating vehicles to passengers are provided. Booking requests for rides are received from passenger devices of passengers. Available vehicles are identified for allocation corresponding to the booking requests. A matrix is generated in which each element corresponds to each booking request-vehicle pair. Each element is determined based on one or more parameter values corresponding to one or more parameters associated with each booking request-vehicle pair and a weight associated with each parameter. The matrix is further processed by means of a Hungarian algorithm to generate another matrix. A vehicle from the available vehicles is allocated to a passenger from the passengers based on the another matrix.