IDEAS home Printed from https://ideas.repec.org/a/wly/mgtdec/v47y2026i2p286-308.html

The Ride‐Hailing and Pricing Strategy Decision With the Application of Autonomous Vehicles

Author

Listed:
  • Bin Li
  • Meng Zhao
  • Ninghao Chen
  • Zhitang Li
  • Huijie Sun

Abstract

The application of autonomous vehicles (AVs) offers a promising avenue to address the profitability challenges of ride‐hailing platforms. However, in a mixed operational model combining human drivers (HDs) and AVs, the high operating costs of AVs raise concerns about their feasibility for large‐scale commercial deployment and the design of optimal pricing strategies. To address these issues, this study develops a cooperative game‐theoretic model involving three parties: a ride‐hailing platform, an AV manufacturer, and a jointly established company. We first examine changes in platform profitability before and after AV application to identify the conditions under which adopting AVs becomes viable. We then compare the payoffs of all market participants under different pricing strategies to determine the optimal scheme that facilitates multiparty cooperation. The results indicate that introducing AVs can strengthen user‐platform stickiness and reduce wage costs for HDs. However, the platform is incentivized to adopt AVs only when the operating cost coefficient is sufficiently low. Moreover, once this cost falls below a certain threshold, a premium pricing strategy yields higher platform profitability and enables a win–win–win outcome among the platform, joint company, and manufacturer. This study advances the literature on economic decision‐making for AV deployment in the ride‐hailing sector and offers theoretical and practical guidance for pricing strategies and partnership design in the era of intelligent mobility.

Suggested Citation

  • Bin Li & Meng Zhao & Ninghao Chen & Zhitang Li & Huijie Sun, 2026. "The Ride‐Hailing and Pricing Strategy Decision With the Application of Autonomous Vehicles," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 47(2), pages 286-308, March.
  • Handle: RePEc:wly:mgtdec:v:47:y:2026:i:2:p:286-308
    DOI: 10.1002/mde.70034
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/mde.70034
    Download Restriction: no

    File URL: https://libkey.io/10.1002/mde.70034?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
    ---><---

    References listed on IDEAS

    as
    1. Niu, Baozhuang & Xie, Fengfeng & Chen, Lei, 2024. "Analysis of global brands’ green procurement strategy: Co-opetitive local sourcing vs. overseas sourcing under delivery disruption," Omega, Elsevier, vol. 123(C).
    2. Biswas, Debajyoti & Jalali, Hamed & Ansaripoor, Amir H. & De Giovanni, Pietro, 2023. "Traceability vs. sustainability in supply chains: The implications of blockchain," European Journal of Operational Research, Elsevier, vol. 305(1), pages 128-147.
    3. Lin, Xiaogang & Sun, Cuiying & Cao, Bin & Zhou, Yong-Wu & Chen, Chuanying, 2021. "Should ride-sharing platforms cooperate with car-rental companies? Implications for consumer surplus and driver surplus," Omega, Elsevier, vol. 102(C).
    4. Li, Yanan & Li, Xiang & Zhang, Sicheng, 2021. "Optimal pricing of customized bus services and ride-sharing based on a competitive game model," Omega, Elsevier, vol. 103(C).
    5. Huang, Lingchen & Liu, Bin & Zhang, Rong, 2024. "Channel strategies for competing retailers: Whether and when to introduce live stream?," European Journal of Operational Research, Elsevier, vol. 312(2), pages 413-426.
    6. Saif Benjaafar & Zicheng Wang & Xiaotang Yang, 2025. "The Impact of Automation on Workers When Workers Are Strategic: The Case of Ride-Hailing," Manufacturing & Service Operations Management, INFORMS, vol. 27(5), pages 1571-1586, September.
    7. Niu, Baozhuang & Zhang, Nan & Zhang, Jianhua, 2024. "How to Induce Multinational Firms’ Local Sourcing to Break Carbon Lock-in?," European Journal of Operational Research, Elsevier, vol. 315(2), pages 613-625.
    8. Omar Besbes & Francisco Castro & Ilan Lobel, 2021. "Surge Pricing and Its Spatial Supply Response," Management Science, INFORMS, vol. 67(3), pages 1350-1367, March.
    9. He, Peng & Shang, Qi & Pedrycz, Witold & Chen, Zhen-Song, 2024. "Short video creation and traffic investment decision in social e-commerce platforms," Omega, Elsevier, vol. 128(C).
    10. Ji, Guojun & Fu, Tianyu & Li, Shuhao, 2023. "Optimal selling format considering price discount strategy in live-streaming commerce," European Journal of Operational Research, Elsevier, vol. 309(2), pages 529-544.
    11. Zhong-Zhong Jiang & Guangwen Kong & Yinghao Zhang, 2021. "Making the Most of Your Regret: Workers’ Relocation Decisions in On-Demand Platforms," Manufacturing & Service Operations Management, INFORMS, vol. 23(3), pages 695-713, May.
    12. Opher Baron & Oded Berman & Mehdi Nourinejad, 2022. "Introducing Autonomous Vehicles: Adoption Patterns and Impacts on Social Welfare," Manufacturing & Service Operations Management, INFORMS, vol. 24(1), pages 352-369, January.
    13. Juan Camilo Castillo & Dan Knoepfle & E. Glen Weyl, 2025. "Matching and Pricing in Ride Hailing: Wild Goose Chases and How to Solve Them," Management Science, INFORMS, vol. 71(5), pages 4377-4395, May.
    Full references (including those not matched with items on IDEAS)

    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. Hu, Xinru & Zhou, Shuiyin & Luo, Xiaomeng & Li, Jianbin & Zhang, Chi, 2024. "Optimal pricing strategy of an on-demand platform with cross-regional passengers," Omega, Elsevier, vol. 122(C).
    2. 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.
    3. Fan, Xiaojun & Zhang, Lu, 2026. "Social E-commerce Operations: Is it wise to adopt short video and live-streaming together?," Omega, Elsevier, vol. 138(C).
    4. Yan, Rui & Chen, Yuwen & Liu, Baolong & Wang, Xuege, 2025. "Promoting carpooling on car-hailing platforms: Order allocation and motivating subsidy," Transportation Research Part B: Methodological, Elsevier, vol. 199(C).
    5. Zhou, Xiaoyang & Liu, He & Li, Jialu & Zhang, Kai & Lev, Benjamin, 2023. "Channel strategies when digital platforms emerge: A systematic literature review," Omega, Elsevier, vol. 120(C).
    6. Xu, Xiaoping & Chen, Dianming & Cheng, T.C.E. & Choi, Tsan-Ming, 2026. "When should metaverse technology be adopted in live streaming considering consumer returns?," European Journal of Operational Research, Elsevier, vol. 330(2), pages 487-511.
    7. Zhao, Meng & Li, Bin & Ren, Jiali & Hao, Zhihua, 2023. "Competition equilibrium of ride-sourcing platforms and optimal government subsidies considering customers’ green preference under peak carbon dioxide emissions," International Journal of Production Economics, Elsevier, vol. 255(C).
    8. Yu Xia & Jiaping Xie & Tingting Zhang, 2025. "Supply chain channel selection and discount strategy under influencer marketing," Annals of Operations Research, Springer, vol. 347(3), pages 1567-1593, April.
    9. Li, Qingying & Zhu, Shuo & Choi, Tsan-Ming & Shen, Bin, 2025. "Maintaining E-commerce supply chain viability: Addressing supply risks with a strategic live-streaming channel," Omega, Elsevier, vol. 133(C).
    10. Zhen, Xueping & Wang, Ping & Li, Xinran, 2024. "The Streamer's sales strategy choice considering sales effort," Journal of Retailing and Consumer Services, Elsevier, vol. 78(C).
    11. Cao, Kaiying & Sun, Suqin, 2025. "Cross-border fresh produce sourcing and blockchain technology adoption decisions considering spillover effects," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 203(C).
    12. Chen, Zhongwei & Ji, Chenlu & Zhang, Lin & Zhang, Jianghua, 2025. "Strategic choices in live-streaming e-commerce: Balancing live-streaming selling mode and return-freight insurance strategy," Journal of Retailing and Consumer Services, Elsevier, vol. 86(C).
    13. Cai, Shoujie & Li, Sijie & Xue, Jingjing & Han, Xiaohua, 2026. "Product bundling strategy and pricing for co-livestreaming rooms considering consumer subscription," Omega, Elsevier, vol. 138(C).
    14. Raj, Ashish & Das, Debabrata, 2025. "Optimizing Q-commerce delivery: Unravelling the interplay of fee, penalty, and rider-platform collaborative efforts," International Journal of Production Economics, Elsevier, vol. 281(C).
    15. Xu, Yuqiu & Cao, Kaiying, 2025. "Competition or co-opetition: Optimal fresh produce delivery mode strategy for livestreaming platform," International Journal of Production Economics, Elsevier, vol. 283(C).
    16. Duan, Yongrui & Song, Jia, 2024. "The adoption of live streaming channel considering impulse buying and product returns," International Journal of Production Economics, Elsevier, vol. 274(C).
    17. Xia, Liangjie & Zhang, Mengmeng & Wang, Jun & Hou, Pengwen, 2025. "Platform traffic support strategies under dual live-streaming channels," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 203(C).
    18. Nie, Fapeng & Li, Xiang & Zhou, Chang, 2024. "Impact of privacy regulation involving information collection on the ride-hailing market," Omega, Elsevier, vol. 126(C).
    19. Chen, Qiuyan & Yan, Xin & Bian, Yiwen & Han, Xiaohua, 2025. "Live streaming channel and product assortment with both national and store brand products," Omega, Elsevier, vol. 131(C).
    20. Pu, Xujin & Dai, Mingzhuo & Zhang, Jianqiang & Zhang, Wen, 2025. "Product selling, social utility and virtual tips in live streaming," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 201(C).

    More about this item

    Statistics

    Access and download statistics

    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:wly:mgtdec:v:47:y:2026:i:2:p:286-308. 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: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/cgi-bin/jhome/7976 .

    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.