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Ingegneria Sismica

Ingegneria Sismica

The Study on the Pricing decision of Online car-hailing platforms Considering Open participation mode and Driver charges

Author(s): Jingjing Fan1, Min Guo1
1School of Economics and Management, North University of China, Taiyuan, 030051, Shanxi, China
Fan, Jingjing. and Guo, Min. “The Study on the Pricing decision of Online car-hailing platforms Considering Open participation mode and Driver charges.” Ingegneria Sismica Volume 43 Issue 3: 1-23, doi:10.65102/is20261251.

Abstract

By constructing Hotelling spatial competition models, this study examines how online car-hailing platforms with different open participation models should formulate pricing strategies under varying supply and demand conditions, and analyzes the impact of fees charged to drivers by the platform-on-platform profit under different models. The results indicate that when the supply of ride-hailing services exceeds demand, the platform can achieve greater revenue by adopting a partially open strategy. Conversely, when the market is supply-constrained, the platform can achieve greater revenue by adopting a completely closed strategy. The revenue of online car-hailing platforms adopting different open models is influenced by the cross-group network effects between passengers and drivers. When cross-group network effects are high, the maximum revenue of platforms adopting a complete open modell decreases as the platform’s platform commission percentage increases when the ride-hailing market is in short supply, and increases as the platform commission percentage increases when supply exceeds demand. The maximum revenue of platforms adopting a full-closed modell decreases as the vehicle leasing costs for platform-owned vehicles increase. For platforms adopting a partially open model, the maximum revenue should prioritize assigning orders to self-operated vehicle drivers when supply exceeds demand. Based on the above conclusions, relevant recommendations are proposed for online car-hailing platforms, aiming to provide theoretical guidance for adjusting operational strategies.

Keywords
online car-hailing platforms; open participation modes; pricing decision; supply-demand condition

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