How do B2C and C2C ride-sourcing platforms perform with and without market aggregation: Theoretical analysis

Recently, there has been a rapid growth in third-party aggregation platforms that simultaneously integrate ride-sourcing companies and travelers. Travelers on the aggregation platform can select one or more companies, and the aggregation platform will choose the optimal matching vehicle from the chosen companies to provide services. Company aggregation refers to the process through which independent ride-sourcing companies access and accept dispatching from aggregation platforms. Company aggregation is an irreversible market trend. This study aims to explore the impact of different types of company aggregation on multiple stakeholders and their decisions in the market. Passenger travel choices and competitive interactions among ride-sourcing companies are modeled and subsequently validated through numerical simulations. Two prevailing business models, business-to-consumer (B2C) and customer-to-customer (C2C), are explicitly incorporated. The impacts of company aggregation are then examined under three distinct scenarios: (i) aggregation among B2C companies, (ii) aggregation among C2C companies, and (iii) simultaneous aggregation encompassing both B2C and C2C companies. Theoretical analysis indicates that under certain conditions, all three aggregation scenarios can reduce travel costs and increase total demand. The numerical experiments first evaluates the market efficiency of company aggregation under fixed pricing, thereby verifying the conclusions of the theoretical analysis. The reduction in travel costs can reach up to 9.6%. However, aggregation may potentially decrease the profits of some companies. Consequently, this study investigates the impact of aggregation on companies’ pricing strategies and profit changes. The numerical experiments demonstrate that only when the aggregated companies collaborate on pricing within a certain range can a win-win outcome be achieved. This study provides a reference for different types of companies to develop management strategies after company aggregation.