Market Expanding or Market Stealing? Platform Competition in Bike-Sharing

Guangyu Cao (), Ginger Zhe Jin () and Li-An Zhou

Working Papers from eSocialSciences

Abstract: The recent rise of dockless bike-sharing is dominated by two platforms: one started first in 82 Chinese cities, 59 of which were subsequently entered by the second platform. Using these variations, the paper studies how the entrant affects the incumbent’s market performance. To our surprise, the entry expands the market for the incumbent, not only boosting its total number of trips but also allowing the incumbent to achieve higher revenue per trip, improve bike utilization rate, and form a wider and more evenly distributed network. These market expansion effects dominate a significant market-stealing effect on the incumbent’s old users. The findings suggest that platform entry can divert the perceived path to winners-take-all in a market with positive network effects, and competition with the outside goods is at least as important as the competition between platforms, especially when users multi-home across compatible networks.

Keywords: eSS; market expanding; market stealing; competition; bike sharing; chinese countries; China; market performance; revenue; bike utilization rate; market-stealing effect (search for similar items in EconPapers)
Date: 2018-09
Note: Institutional Papers
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Citations: View citations in EconPapers (1)

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