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

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  • 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
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