B2C online ride-hailing pricing and service optimization under competitions

Abstract

<p style='text-indent:20px;'>B2C online ride-hailing is to provide customers with anytime, anywhere and on-call ride services by professional vehicles and professional drivers. How to maintain good service quality and reasonable pricing under competition is of importance to a platform. In this paper, we will integrate pricing and service together to maximize the profit of a platform through Nash game theory. Specifically, we will establish the models for there scenarios: the demand market competition under decline of ride demand, the supply market competition under surge of ride demand, and the coexistence of demand and supply market competition for stable ride demand. Then, the Nash equilibriums are derived for the three models which are corresponding to minimize ride price, optimize quality of efforts and maximize profit. Our results uncover that the driver's incentive amount is conducive to the profit of both platform and the drivers for the case of demand market competition. The platforms and drivers achieve the highest profit under supply market competition, and the strategy through minimizing price and maximizing service can effectively adjust the balance between market supply and demand.</p>

Impacts of differentiated services and competition on the pricing strategies of ride‐hailing platforms

“…(2020) considered spatial differentiation and network externality in the pricing mechanism of an online car-hailing platform and analyzed the game competition among platform users and the impact on the platform's optimal pricing. Related studies also include Meng et al (2022) and Zhong et al (2022). Based on the above three categories of related literature, we find that few researchers have studied multiple pricing strategies considering competition between platforms.…”