A Theory of Multihoming in Rideshare Competition / Kevin A. Bryan, Joshua S. Gans.

Format:

Book

Author/Creator:

Bryan, Kevin A.

Contributor:

National Bureau of Economic Research.

Gans, Joshua S.

Series:

Working Paper Series (National Bureau of Economic Research) no. w24806.

NBER working paper series no. w24806

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2018.

Summary:

We examine competition amongst ridesharing platforms where firms compete by choosing both the price of rides and the extent of idleness. Idleness means drivers who are compensated without picking up passengers, instead acting to reduce passenger wait time. We show that when consumers are the only agents who multihome, idleness falls compared with when they face a monopoly ridesharing platform. When drivers and consumers multihome, idleness further falls to zero as it involves costs for each platform that are appropriated, in part, by their rival. Interestingly, socially superior outcomes may involve monopoly or competition under various multihoming regimes, depending on the density of the city, and the relative costs of idleness versus consumer disutility of waiting.

Notes:

Print version record

July 2018.