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Competing Platforms and Transport Equilibrium

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  • Nicola Rosaia

Abstract

I study whether platform competition in app‐based transportation generates waste and whether consolidating competing networks would improve efficiency. I build a spatial model of a ride‐hailing market where competing platforms set prices strategically and estimate it using detailed data from two major platforms in New York City. Comparing the status quo to simulated counterfactuals, I find that: (i) platform market power and the fragmentation of users across networks cause a $176 million annual loss in social welfare and waste 21% of driver‐generated traffic; (ii) a platform merger would trade off gains from pooling all users into a single network against harms from greater market power, reducing traffic by 8% but lowering consumer surplus by $77 million per year due to a 4% price hike; and (iii) interoperability regulations would bring these gains without undermining competition, reducing wasteful traffic by 6% while raising consumer surplus by $63 million per year.

Suggested Citation

  • Nicola Rosaia, 2025. "Competing Platforms and Transport Equilibrium," Econometrica, Econometric Society, vol. 93(6), pages 2235-2271, November.
    • Handle: RePEc:wly:emetrp:v:93:y:2025:i:6:p:2235-2271
    DOI: 10.3982/ECTA21773
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    References listed on IDEAS

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