EconPapers    
Economics at your fingertips  
 

The Impact of Multi-homing in a Ride-Hailing Market

Oksana Loginova (), X. Wang () and Qihong Liu ()

No 2013, Working Papers from Department of Economics, University of Missouri

Abstract: Platforms such as Uber, Lyft and Airbnb serve two-sided markets with drivers (property owners) on one side and riders (renters) on the other side. Some agents multi-home. In the case of ride-sharing, a driver may drive for both Uber and Lyft, and a rider may use both apps and request a ride from the company that has a driver close by. In this paper, we are interested in welfare implications of multi-homing in such a market. Our model abstracts away from entry/exit by drivers and riders as well as pricing by platforms. Both drivers' and riders' surpluses are determined by the average time between a request and the actual pickup. The benchmark setting is a monopoly platform and the direct comparison is a single-homing duopoly. The former is more efficient since it has a thicker market. Next, we consider two multi-homing settings, multi-homing on the rider side and multi-homing on the driver side. Relative to single-homing duopoly, we find that multi-homing on either side improves the overall welfare. However, multi-homing drivers potentially benefit themselves at the cost of single-homing drivers. In contrast, multi-homing riders benefit themselves as well as single-homing riders, representing a more equitable distribution of gains from multi-homing.

Keywords: Ride-hailing platform; two-sided markets; network externalities; multi-homing (search for similar items in EconPapers)
JEL-codes: D85 L12 L13 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2020-10-09
New Economics Papers: this item is included in nep-com, nep-mic, nep-pay and nep-ure
References: Add references at CitEc
Citations:

Downloads: (external link)
https://drive.google.com/file/d/1D8kwC2vSYNSi0ZLJA ... f39/view?usp=sharing (application/pdf)

Related works:
Working Paper: The Impact of Multi-homing in a Ride-Hailing Market (2017) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:umc:wpaper:2013

Access Statistics for this paper

More papers in Working Papers from Department of Economics, University of Missouri Contact information at EDIRC.
Bibliographic data for series maintained by Chao Gu ().

 
Page updated 2025-03-20
Handle: RePEc:umc:wpaper:2013