IDEAS home Printed from https://ideas.repec.org/a/eee/retrec/v94y2022ics0739885922000075.html
   My bibliography  Save this article

Monetary and hassle savings as strategic variables in the ride-sharing market

Author

Listed:
  • Ravula, Prashanth

Abstract

Sharing economy providers (SEPs) host digital platforms through which individuals can sell services to other individuals. These platforms offer two types of savings to consumers: monetary savings from lower prices typically offered by SEPs relative to legacy providers (LPs) and hassle savings from the reduced effort and/or time that consumers expend to search, identify, and transact with providers. We hypothesize that consumers will weigh monetary savings less than hassle savings if the former is below a certain threshold, but that the opposite will be true for larger savings. We empirically tested our hypothesis using ride data from Uber (SEP) and Yellow Taxi (LP). Consistent with our assumption, the study found a threshold ride distance, 6.64 miles, below which Yellow Taxi was preferred for the hassle savings and above which Uber was preferred for the monetary savings. This paper discusses implications that are generalizable for other sharing economy services.

Suggested Citation

  • Ravula, Prashanth, 2022. "Monetary and hassle savings as strategic variables in the ride-sharing market," Research in Transportation Economics, Elsevier, vol. 94(C).
    • Handle: RePEc:eee:retrec:v:94:y:2022:i:c:s0739885922000075
    DOI: 10.1016/j.retrec.2022.101184
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0739885922000075
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.retrec.2022.101184?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Colin Camerer & Linda Babcock & George Loewenstein & Richard Thaler, 1997. "Labor Supply of New York City Cabdrivers: One Day at a Time," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(2), pages 407-441.
    2. Kevin A. Bryan & Joshua S. Gans, 2019. "A theory of multihoming in rideshare competition," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 28(1), pages 89-96, January.
    3. Rayle, Lisa & Dai, Danielle & Chan, Nelson & Cervero, Robert & Shaheen, Susan, 2016. "Just a better taxi? A survey-based comparison of taxis, transit, and ridesourcing services in San Francisco," Transport Policy, Elsevier, vol. 45(C), pages 168-178.
    4. Fleura Bardhi & Giana M. Eckhardt, 2012. "Access-Based Consumption: The Case of Car Sharing," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 39(4), pages 881-898.
    5. Holmgren, Johan, 2020. "The effect of public transport quality on car ownership – A source of wider benefits?," Research in Transportation Economics, Elsevier, vol. 83(C).
    6. Felipe F. Dias & Patrícia S. Lavieri & Venu M. Garikapati & Sebastian Astroza & Ram M. Pendyala & Chandra R. Bhat, 2017. "A behavioral choice model of the use of car-sharing and ride-sourcing services," Transportation, Springer, vol. 44(6), pages 1307-1323, November.
    7. Shokoohyar, Sina & Sobhani, Ahmad & Sobhani, Anae, 2020. "Impacts of trip characteristics and weather condition on ride-sourcing network: Evidence from Uber and Lyft," Research in Transportation Economics, Elsevier, vol. 80(C).
    8. Brodeur, Abel & Nield, Kerry, 2018. "An empirical analysis of taxi, Lyft and Uber rides: Evidence from weather shocks in NYC," Journal of Economic Behavior & Organization, Elsevier, vol. 152(C), pages 1-16.
    9. Ricardo Lagos, 2000. "An Alternative Approach to Search Frictions," Journal of Political Economy, University of Chicago Press, vol. 108(5), pages 851-873, October.
    10. Zhang, Kenan & Nie, Yu (Marco), 2021. "To pool or not to pool: Equilibrium, pricing and regulation," Transportation Research Part B: Methodological, Elsevier, vol. 151(C), pages 59-90.
    11. Chakravarthi Narasimhan & Purushottam Papatla & Baojun Jiang & Praveen K. Kopalle & Paul R. Messinger & Sridhar Moorthy & Davide Proserpio & Upender Subramanian & Chunhua Wu & Ting Zhu, 2018. "Sharing Economy: Review of Current Research and Future Directions," Customer Needs and Solutions, Springer;Institute for Sustainable Innovation and Growth (iSIG), vol. 5(1), pages 93-106, March.
    12. Jiayi Joey Yu & Christopher S. Tang & Zuo-Jun Max Shen & Xiqun Michael Chen, 2020. "A Balancing Act of Regulating On-Demand Ride Services," Management Science, INFORMS, vol. 66(7), pages 2975-2992, July.
    13. Henry S. Farber, 2015. "Why you Can’t Find a Taxi in the Rain and Other Labor Supply Lessons from Cab Drivers," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 130(4), pages 1975-2026.
    14. Jacob, Jagan & Roet-Green, Ricky, 2021. "Ride solo or pool: Designing price-service menus for a ride-sharing platform," European Journal of Operational Research, Elsevier, vol. 295(3), pages 1008-1024.
    15. Rayle, Lisa & Dai, Danielle & Chan, Nelson & Cervero, Robert & Shaheen, Susan PhD, 2016. "Just A Better Taxi? A Survey-Based Comparison of Taxis, Transit, and Ridesourcing Services in San Francisco," Institute of Transportation Studies, Research Reports, Working Papers, Proceedings qt60v8r346, Institute of Transportation Studies, UC Berkeley.
    16. Kenneth Button, 2010. "Transport Economics, 3rd Edition," Books, Edward Elgar Publishing, number 1863.
    17. Henry S. Farber, 2005. "Is Tomorrow Another Day? The Labor Supply of New York City Cabdrivers," Journal of Political Economy, University of Chicago Press, vol. 113(1), pages 46-82, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wang, Hai & Yang, Hai, 2019. "Ridesourcing systems: A framework and review," Transportation Research Part B: Methodological, Elsevier, vol. 129(C), pages 122-155.
    2. Ke, Jintao & Li, Xinwei & Yang, Hai & Yin, Yafeng, 2021. "Pareto-efficient solutions and regulations of congested ride-sourcing markets with heterogeneous demand and supply," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 154(C).
    3. Li, Manzi & Jiang, Gege & Lo, Hong K., 2022. "Pricing strategy of ride-sourcing services under travel time variability," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 159(C).
    4. Fayed, Lynn & Nilsson, Gustav & Geroliminis, Nikolas, 2023. "On the utilization of dedicated bus lanes for pooled ride-hailing services," Transportation Research Part B: Methodological, Elsevier, vol. 169(C), pages 29-52.
    5. Aguilera-García, Álvaro & Gomez, Juan & Velázquez, Guillermo & Vassallo, Jose Manuel, 2022. "Ridesourcing vs. traditional taxi services: Understanding users’ choices and preferences in Spain," Transportation Research Part A: Policy and Practice, Elsevier, vol. 155(C), pages 161-178.
    6. Zhang, Kenan & Nie, Yu (Marco), 2022. "Mitigating traffic congestion induced by transportation network companies: A policy analysis," Transportation Research Part A: Policy and Practice, Elsevier, vol. 159(C), pages 96-118.
    7. Wang, Wei & Miao, Wei & Liu, Yongdong & Deng, Yiting & Cao, Yunfei, 2022. "The impact of COVID-19 on the ride-sharing industry and its recovery: Causal evidence from China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 155(C), pages 128-141.
    8. Berger, Thor & Chen, Chinchih & Frey, Carl Benedikt, 2018. "Drivers of disruption? Estimating the Uber effect," European Economic Review, Elsevier, vol. 110(C), pages 197-210.
    9. Vignon, Daniel & Yin, Yafeng & Ke, Jintao, 2023. "Regulating the ride-hailing market in the age of uberization," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 169(C).
    10. Martin, Vincent, 2017. "When to quit: Narrow bracketing and reference dependence in taxi drivers," Journal of Economic Behavior & Organization, Elsevier, vol. 144(C), pages 166-187.
    11. Yu, Haitao & Peng, Zhong-Ren, 2019. "Exploring the spatial variation of ridesourcing demand and its relationship to built environment and socioeconomic factors with the geographically weighted Poisson regression," Journal of Transport Geography, Elsevier, vol. 75(C), pages 147-163.
    12. Yingjie Zhang & Beibei Li & Ramayya Krishnan, 2020. "Learning Individual Behavior Using Sensor Data: The Case of Global Positioning System Traces and Taxi Drivers," Information Systems Research, INFORMS, vol. 31(4), pages 1301-1321, December.
    13. Zhong, Yuanguang & Lan, Yibo & Chen, Zhi & Yang, Jiazi, 2023. "On-demand ride-hailing platforms with heterogeneous quality-sensitive customers: Dedicated system or pooling system?," Transportation Research Part B: Methodological, Elsevier, vol. 173(C), pages 247-266.
    14. Kareem Haggag & Brian McManus & Giovanni Paci, 2017. "Learning by Driving: Productivity Improvements by New York City Taxi Drivers," American Economic Journal: Applied Economics, American Economic Association, vol. 9(1), pages 70-95, January.
    15. Vinayak, Pragun & Dias, Felipe F. & Astroza, Sebastian & Bhat, Chandra R. & Pendyala, Ram M. & Garikapati, Venu M., 2018. "Accounting for multi-dimensional dependencies among decision-makers within a generalized model framework: An application to understanding shared mobility service usage levels," Transport Policy, Elsevier, vol. 72(C), pages 129-137.
    16. Ilahi, Anugrah & Belgiawan, Prawira F. & Balac, Milos & Axhausen, Kay W., 2021. "Understanding travel and mode choice with emerging modes; a pooled SP and RP model in Greater Jakarta, Indonesia," Transportation Research Part A: Policy and Practice, Elsevier, vol. 150(C), pages 398-422.
    17. Sun, Hao & Wang, Hai & Wan, Zhixi, 2019. "Model and analysis of labor supply for ride-sharing platforms in the presence of sample self-selection and endogeneity," Transportation Research Part B: Methodological, Elsevier, vol. 125(C), pages 76-93.
    18. Tirachini, Alejandro & del Río, Mariana, 2019. "Ride-hailing in Santiago de Chile: Users’ characterisation and effects on travel behaviour," Transport Policy, Elsevier, vol. 82(C), pages 46-57.
    19. Vij, Akshay & Ryan, Stacey & Sampson, Spring & Harris, Susan, 2020. "Consumer preferences for on-demand transport in Australia," Transportation Research Part A: Policy and Practice, Elsevier, vol. 132(C), pages 823-839.
    20. Leong, Kaiwen & Li, Huailu & Xu, Haibo, 2019. "Effect of Enforcement Shock on Pushers' Activities: Evidence from an Asian Drug-Selling Gang," IZA Discussion Papers 12083, Institute of Labor Economics (IZA).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:retrec:v:94:y:2022:i:c:s0739885922000075. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/620614/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.