The impact of autonomous vehicle encroachment on human-driven ride-hailing platforms: Implications for peer-to-peer and fleet-based modes

As autonomous vehicle (AV) services continue to emerge, human-driven ride-hailing platforms face increasing competitive pressure. This paper examines how competition from independent AV-driven platforms affects traditional human-driven platforms. We develop a game-theoretic model to study competition between AV-driven and human-driven ride-hailing platforms. We consider two operating modes for human-driven platforms: a peer-to-peer (P2P) mode, where individual vehicle owners provide services, and a fleet-based mode, where the platform operates a fixed fleet of vehicles. First, AV encroachment does not always harm the human-driven platform in the P2P mode. However, it consistently reduces profits in the fleet-based mode. Second, if consumers prefer AVs, the P2P mode better protects the human-driven platform when AV operating costs are high. When AV costs are low, the fleet-based mode is more advantageous. Third, when consumers value AVs less than human-driven vehicles (HVs), higher AV operating costs weaken AV encroachment on the human-driven platform in the P2P mode and enlarge the equilibrium region where HVs dominate, while in the fleet-based mode, higher AV costs strengthen AV encroachment and expand the equilibrium region in which AVs and HVs coexist. These findings provide practical guidance for traditional ride-hailing platforms on how to respond to competitive pressure from AV encroachment.