Platform Governance in the Presence of Within-Complementor Interdependencies: Evidence from the Rideshare Industry

Hyuck David Chung (), Yue Maggie Zhou () and Sendil Ethiraj ()
Additional contact information
Hyuck David Chung: Strategy Department, University of Michigan, Ann Arbor, Michigan 48109
Yue Maggie Zhou: Strategy Department, University of Michigan, Ann Arbor, Michigan 48109
Sendil Ethiraj: Strategy and Entrepreneurship Department, London Business School, London NW1 4SA, United Kingdom

Management Science, 2024, vol. 70, issue 2, 799-814

Abstract: Existing studies suggest that platform access restriction may cause restricted complementors to switch to competing platforms, which will increase complement quantity on competing platforms. We re-examine this prediction by accounting for the impact of economies of scope on complementor responses to platform access restriction. We argue that restricting a complementor’s access on a platform may prevent it from achieving economies of scope from multi-homing, thereby incentivizing it to abandon both the restricted and (unrestricted) competing platforms. Using rideshare data in New York City, we compare the numbers of trips made by Lyft and Uber drivers, respectively, before and after Lyft restricted drivers’ access on its platform. We find that Lyft’s access restriction reduced trip numbers not only on Lyft but also on Uber. In addition, both Lyft’s and Uber’s trip numbers decreased not only during the restricted low-demand periods (e.g., non-rush hours) but also during the unrestricted high-demand periods (e.g., rush hours). In contrast, after a substantial number of multi-homing drivers left both platforms following Lyft’s access restriction, a subsequent access restriction by Uber led to an increase in trip numbers on Lyft. These results highlight the importance of accounting for interdependencies across complementor activities when designing platform governance policies.

Keywords: platform governance; interdependencies; multi-homing; complementor; rideshare (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
http://dx.doi.org/10.1287/mnsc.2023.4706 (application/pdf)

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:inm:ormnsc:v:70:y:2024:i:2:p:799-814

Access Statistics for this article

More articles in Management Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().