Competition and third-party platform-integration in ride-sourcing markets

Yaqian Zhou, Hai Yang, Jintao Ke, Hai Wang and Xinwei Li

Transportation Research Part B: Methodological, 2022, vol. 159, issue C, 76-103

Abstract: Recently, some third-party integrators attempt to integrate the ride services offered by multiple independent ride-sourcing platforms. Accordingly, passengers can request ride through the integrators and receive ride service from any one of the ride-sourcing platforms. This novel business model, termed as third-party platform-integration in this work, has potentials to alleviate market fragmentation cost resulting from demand splitting among multiple platforms. Although most existing studies focus on operation strategies for one single monopolist platform, much less is known about the competition and platform-integration and their implications on operation strategy and system efficiency. In this work, we propose mathematical models to describe the ride-sourcing market with multiple competing platforms and compare system performance measures between two market scenarios (i.e., with and without platform-integration) at Nash equilibrium and social optimum. We find that platform-integration can increase the total realized demand and social welfare at Nash equilibrium and social optimum, but may not necessarily generate a greater profit when the vehicle supply is sufficiently large, and/or the market is considerably fragmented. We show that the market with platform-integration generally achieves greater social welfare due to two reasons. First, platform-integration can generate a thicker market and reduce matching frictions; second, multiple ride-sourcing platforms are competing for passengers by setting lower trip fares independently.

Keywords: Ride-sourcing; competition; platform-integration (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0191261521001454
Full text for ScienceDirect subscribers only

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:transb:v:159:y:2022:i:c:p:76-103

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/supportfaq.cws_home/regional
https://shop.elsevie ... _01_ooc_1&version=01

DOI: 10.1016/j.trb.2021.08.002

Access Statistics for this article

Transportation Research Part B: Methodological is currently edited by Fred Mannering

More articles in Transportation Research Part B: Methodological from Elsevier
Bibliographic data for series maintained by Catherine Liu ().