With the rapid development of shared mobility, third-party integrators have emerged recently to integrate competing platforms that offer on-demand ride services in ride-sourcing markets. Through such integrators, passengers can request rides and receive services from any one of the integrated platforms. This novel business model has great potential to alleviate the inefficiency of market fragmentation caused by demand split across multiple platforms. Although a growing body of literature has examined the ride-sourcing market with a single monopolist platform, much less is known about the competition and integration of multiple platforms and their impacts on the individual platforms’ operating strategies, as well as the resulting system efficiency.

Competition in ride-sourcing markets is...[ Read more ]

With the rapid development of shared mobility, third-party integrators have emerged recently to integrate competing platforms that offer on-demand ride services in ride-sourcing markets. Through such integrators, passengers can request rides and receive services from any one of the integrated platforms. This novel business model has great potential to alleviate the inefficiency of market fragmentation caused by demand split across multiple platforms. Although a growing body of literature has examined the ride-sourcing market with a single monopolist platform, much less is known about the competition and integration of multiple platforms and their impacts on the individual platforms’ operating strategies, as well as the resulting system efficiency.

Competition in ride-sourcing markets is a double-edged sword. On the one hand, competition in the ride-sourcing markets prevents a monopolist platform from greedily maximizing its own profit by distorting its operating strategies from socially efficient levels. On the other hand, competition between platforms leads to market fragmentation, thereby increasing matching frictions, because the matching technologies used for drivers and passengers in ride-sourcing markets generally exhibit increasing returns to scale, or matching is more efficient in a thicker two-sided market with more passengers and drivers involved in one platform.

A third-party integrator can harness this double-edged sword by maintaining competition between platforms while reducing market fragmentation and matching frictions. In this thesis, we are particularly interested in understanding the implications of platform integration on market equilibrium. Platform integration can generally be expected to improve system efficiency because it increases market thickness. However, the competing ride-sourcing platforms may choose whether or not to join the integrated platform and may adjust their operating strategies correspondingly, which may, in turn, affect the market equilibrium and the resulting improvement in market efficiency. Our analyses offer valuable managerial insights into on-demand ride-sourcing services with an emerging third-party integrator.