Two-sided market pricing model for optimizing strategy in a taxi service platform considering price and time sensitivities of passengers

Chaojun Wang, Peng Li, Hanyu Yang and Jing Zhao

Physica A: Statistical Mechanics and its Applications, 2025, vol. 670, issue C

Abstract: Under the background of the emergence of online taxi service platforms, the study proposes a two-sided market pricing model focusing on passengers sensitive to both price and waiting time. By utilizing the M/M/k queueing model and a two-sided market pricing model, the research recognizes the on-demand nature of the interaction between the platform and passengers, optimizing their profits. Results show a strict monotonic relationship between passenger demand rate and factors like fleet size, the number of passengers serviced, and platform profit. However, optimal platform pricing displays non-monotonic behavior influenced by passenger utility functions and service utilization rates. An adjustment factor L refines the pricing model, indicating that the weight of passenger profit should not exceed 10.5L+1 for positive overall profit. For platforms with large taxi fleets, a slight price reduction can enhance service rates and profitability. This research provides a theoretical foundation for optimizing taxi pricing and fleet size.

Keywords: Taxi service platform; Two-sided market; Price and time sensitivities; Queueing model (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0378437125002821
Full text for ScienceDirect subscribers only. Journal offers the option of making the article available online on Science direct for a fee of $3,000

Related works:
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:eee:phsmap:v:670:y:2025:i:c:s0378437125002821

DOI: 10.1016/j.physa.2025.130630

Access Statistics for this article

Physica A: Statistical Mechanics and its Applications is currently edited by K. A. Dawson, J. O. Indekeu, H.E. Stanley and C. Tsallis

More articles in Physica A: Statistical Mechanics and its Applications from Elsevier
Bibliographic data for series maintained by Catherine Liu ().