Price dispersion in the rideshare industry: a study of the Mexico City market

Tom Sullivan
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Tom Sullivan: Monash University

Warwick-Monash Economics Student Papers from Warwick Monash Economics Student Papers

Abstract: Nascent and highly dynamic industries such as the rideshare industry have disrupted traditional industries and business models. The use of technology has allowed firms like Uber and Didi to compete over both consumers and workers on an increasingly sophisticated level. This paper explores the use of algorithmic pricing strategies employed by the rideshare industry and the impact of such strategies on the overall level of competition in the market. It uses the Mexico City, Mexico, rideshare industry as a case study. The paper shows that specific firms target specific consumers based on whether those consumers are informed or uninformed about other options in the market, and do so at specific times based on the level of demand in the market. The findings of the paper are relevant for both economic understanding of such markets as well as policy responses.

Keywords: Rideshare; Uber; algorithm; pricing; competition; consumer JEL Classification: D4; L1 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-com, nep-pay and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:wrk:wrkesp:40

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