IDEAS home Printed from https://ideas.repec.org/a/eee/transb/v159y2022icp76-103.html
   My bibliography  Save this article

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

Author

Listed:
  • Zhou, Yaqian
  • Yang, Hai
  • Ke, Jintao
  • Wang, Hai
  • Li, Xinwei

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.

Suggested Citation

  • Zhou, Yaqian & Yang, Hai & Ke, Jintao & Wang, Hai & Li, Xinwei, 2022. "Competition and third-party platform-integration in ride-sourcing markets," Transportation Research Part B: Methodological, Elsevier, vol. 159(C), pages 76-103.
    • Handle: RePEc:eee:transb:v:159:y:2022:i:c:p:76-103
    DOI: 10.1016/j.trb.2021.08.002
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0191261521001454
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.trb.2021.08.002?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. Li, Sen & Tavafoghi, Hamidreza & Poolla, Kameshwar & Varaiya, Pravin, 2019. "Regulating TNCs: Should Uber and Lyft set their own rules?," Transportation Research Part B: Methodological, Elsevier, vol. 129(C), pages 193-225.
    2. Terry A. Taylor, 2018. "On-Demand Service Platforms," Manufacturing & Service Operations Management, INFORMS, vol. 20(4), pages 704-720, October.
    3. Ke, Jintao & Yang, Hai & Li, Xinwei & Wang, Hai & Ye, Jieping, 2020. "Pricing and equilibrium in on-demand ride-pooling markets," Transportation Research Part B: Methodological, Elsevier, vol. 139(C), pages 411-431.
    4. Yang, Hai & Qin, Xiaoran & Ke, Jintao & Ye, Jieping, 2020. "Optimizing matching time interval and matching radius in on-demand ride-sourcing markets," Transportation Research Part B: Methodological, Elsevier, vol. 131(C), pages 84-105.
    5. Al-Kanj, Lina & Nascimento, Juliana & Powell, Warren B., 2020. "Approximate dynamic programming for planning a ride-hailing system using autonomous fleets of electric vehicles," European Journal of Operational Research, Elsevier, vol. 284(3), pages 1088-1106.
    6. Jean-Charles Rochet & Jean Tirole, 2003. "Platform Competition in Two-Sided Markets," Journal of the European Economic Association, MIT Press, vol. 1(4), pages 990-1029, June.
    7. Ke, Jintao & Cen, Xuekai & Yang, Hai & Chen, Xiqun & Ye, Jieping, 2019. "Modelling drivers’ working and recharging schedules in a ride-sourcing market with electric vehicles and gasoline vehicles," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 125(C), pages 160-180.
    8. Yang, Hai & Shao, Chaoyi & Wang, Hai & Ye, Jieping, 2020. "Integrated reward scheme and surge pricing in a ridesourcing market," Transportation Research Part B: Methodological, Elsevier, vol. 134(C), pages 126-142.
    9. Theodoros P. Pantelidis & Joseph Y. J. Chow & Saeid Rasulkhani, 2019. "A many-to-many assignment game and stable outcome algorithm to evaluate collaborative Mobility-as-a-Service platforms," Papers 1911.04435, arXiv.org, revised Jun 2020.
    10. Kostas Bimpikis & Ozan Candogan & Daniela Saban, 2019. "Spatial Pricing in Ride-Sharing Networks," Operations Research, INFORMS, vol. 67(3), pages 744-769, May.
    11. Wang, Hai & Yang, Hai, 2019. "Ridesourcing systems: A framework and review," Transportation Research Part B: Methodological, Elsevier, vol. 129(C), pages 122-155.
    12. 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.
    13. Arnott, Richard, 1996. "Taxi Travel Should Be Subsidized," Journal of Urban Economics, Elsevier, vol. 40(3), pages 316-333, November.
    14. Rasulkhani, Saeid & Chow, Joseph Y.J., 2019. "Route-cost-assignment with joint user and operator behavior as a many-to-one stable matching assignment game," Transportation Research Part B: Methodological, Elsevier, vol. 124(C), pages 60-81.
    15. Mark Armstrong, 2006. "Competition in two‐sided markets," RAND Journal of Economics, RAND Corporation, vol. 37(3), pages 668-691, September.
    16. Mark Armstrong & Julian Wright, 2007. "Two-sided Markets, Competitive Bottlenecks and Exclusive Contracts," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 32(2), pages 353-380, August.
    17. Xu, Zhengtian & Yin, Yafeng & Zha, Liteng, 2017. "Optimal parking provision for ride-sourcing services," Transportation Research Part B: Methodological, Elsevier, vol. 105(C), pages 559-578.
    18. Pantelidis, Theodoros P. & Chow, Joseph Y.J. & Rasulkhani, Saeid, 2020. "A many-to-many assignment game and stable outcome algorithm to evaluate collaborative mobility-as-a-service platforms," Transportation Research Part B: Methodological, Elsevier, vol. 140(C), pages 79-100.
    19. Thomas D. Jeitschko & Mark J. Tremblay, 2020. "Platform Competition With Endogenous Homing," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 61(3), pages 1281-1305, August.
    20. Zhu, Zheng & Qin, Xiaoran & Ke, Jintao & Zheng, Zhengfei & Yang, Hai, 2020. "Analysis of multi-modal commute behavior with feeding and competing ridesplitting services," Transportation Research Part A: Policy and Practice, Elsevier, vol. 132(C), pages 713-727.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wang, Yao & Jin, Huan & Zheng, Shiyuan & Shang, Wen-Long & Wang, Kun, 2023. "Bike-sharing duopoly competition under government regulation," Applied Energy, Elsevier, vol. 343(C).
    2. Jun Tu & Juan Du & Min Huang, 2023. "Competition between Green and Non-Green Travel Companies: The Role of Governmental Subsidies in Green Travel," Sustainability, MDPI, vol. 15(9), pages 1-33, May.
    3. Li, Xiaonan & Li, Xiangyong & Wang, Hai & Shi, Junxin & Aneja, Y.P., 2022. "Supply regulation under the exclusion policy in a ride-sourcing market," Transportation Research Part B: Methodological, Elsevier, vol. 166(C), pages 69-94.
    4. Liu, Yang & Li, Sen, 2023. "An economic analysis of on-demand food delivery platforms: Impacts of regulations and integration with ride-sourcing platforms," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 171(C).
    5. Li, Manzi & Jiang, Gege & Lo, Hong K., 2023. "Optimal cancellation penalty for competing ride-sourcing platforms under waiting time uncertainty," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 174(C).

    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. 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).
    2. Ke, Jintao & Chen, Xiqun (Michael) & Yang, Hai & Li, Sen, 2022. "Coordinating supply and demand in ride-sourcing markets with pre-assigned pooling service and traffic congestion externality," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 166(C).
    3. 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.
    4. Ke, Jintao & Yang, Hai & Li, Xinwei & Wang, Hai & Ye, Jieping, 2020. "Pricing and equilibrium in on-demand ride-pooling markets," Transportation Research Part B: Methodological, Elsevier, vol. 139(C), pages 411-431.
    5. Zhu, Zheng & Ke, Jintao & Wang, Hai, 2021. "A mean-field Markov decision process model for spatial-temporal subsidies in ride-sourcing markets," Transportation Research Part B: Methodological, Elsevier, vol. 150(C), pages 540-565.
    6. Yang, Hai & Qin, Xiaoran & Ke, Jintao & Ye, Jieping, 2020. "Optimizing matching time interval and matching radius in on-demand ride-sourcing markets," Transportation Research Part B: Methodological, Elsevier, vol. 131(C), pages 84-105.
    7. 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.
    8. Wang, Hai & Yang, Hai, 2019. "Ridesourcing systems: A framework and review," Transportation Research Part B: Methodological, Elsevier, vol. 129(C), pages 122-155.
    9. Ke, Jintao & Zhu, Zheng & Yang, Hai & He, Qiaochu, 2021. "Equilibrium analyses and operational designs of a coupled market with substitutive and complementary ride-sourcing services to public transits," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 148(C).
    10. Zhu, Zheng & Xu, Ailing & He, Qiao-Chu & Yang, Hai, 2021. "Competition between the transportation network company and the government with subsidies to public transit riders," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 152(C).
    11. 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.
    12. Li, Xiaonan & Li, Xiangyong & Wang, Hai & Shi, Junxin & Aneja, Y.P., 2022. "Supply regulation under the exclusion policy in a ride-sourcing market," Transportation Research Part B: Methodological, Elsevier, vol. 166(C), pages 69-94.
    13. Guo, Xiaotong & Caros, Nicholas S. & Zhao, Jinhua, 2021. "Robust matching-integrated vehicle rebalancing in ride-hailing system with uncertain demand," Transportation Research Part B: Methodological, Elsevier, vol. 150(C), pages 161-189.
    14. Xu, Zhengtian & Yin, Yafeng & Chao, Xiuli & Zhu, Hongtu & Ye, Jieping, 2021. "A generalized fluid model of ride-hailing systems," Transportation Research Part B: Methodological, Elsevier, vol. 150(C), pages 587-605.
    15. Ke, Jintao & Yang, Hai & Zheng, Zhengfei, 2020. "On ride-pooling and traffic congestion," Transportation Research Part B: Methodological, Elsevier, vol. 142(C), pages 213-231.
    16. Li, Sen & Poolla, Kameshwar & Varaiya, Pravin, 2021. "Impact of congestion charge and minimum wage on TNCs: A case study for San Francisco," Transportation Research Part A: Policy and Practice, Elsevier, vol. 148(C), pages 237-261.
    17. Li, Manzi & Jiang, Gege & Lo, Hong K., 2023. "Optimal cancellation penalty for competing ride-sourcing platforms under waiting time uncertainty," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 174(C).
    18. Wang, Jing-Peng & Huang, Hai-Jun, 2022. "Operations on an on-demand ride service system with express and limousine," Transportation Research Part B: Methodological, Elsevier, vol. 155(C), pages 348-373.
    19. Sen Li & Kameshwar Poolla & Pravin Varaiya, 2020. "Impact of Congestion Charge and Minimum Wage on TNCs: A Case Study for San Francisco," Papers 2003.02550, arXiv.org, revised Feb 2021.
    20. Li, Baicheng & Szeto, W.Y. & Luo, Qin, 2021. "A peak-period taxi scheme design problem: Formulation and policy implications," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 146(C).

    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:transb:v:159:y:2022:i:c:p:76-103. 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/548/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.