A Balancing Act of Regulating On-Demand Ride Services
Autor: | Zuo-Jun Max Shen, Xiqun Michael Chen, Jiayi Joey Yu, Christopher S. Tang |
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Rok vydání: | 2020 |
Předmět: | |
Zdroj: | Management Science. 66:2975-2992 |
ISSN: | 1526-5501 0025-1909 |
Popis: | Regulating on-demand ride-hailing services (e.g., Uber and DiDi) requires a balance of multiple competing objectives: encouraging innovative business models (e.g., DiDi), sustaining traditional industries (e.g., taxi), creating new jobs, and reducing traffic congestion. This study is motivated by a regulatory policy implemented by the Chinese government in 2017 and a similar policy approved by the New York City Council in 2018 that regulate the “maximum” number of registered Uber/DiDi drivers. We examine the impact of these policies on the welfare of different stakeholders (i.e., consumers, taxi drivers, on-demand ride service company, and independent drivers). By analyzing a two-period dynamic game that involves these stakeholders, we find that, without government intervention, the on-demand ride service platform can drive the traditional taxi industry out of the market under certain conditions. Relative to no regulations and a complete ban policy, a carefully designed regulatory policy can strike a better balance of multiple competing objectives. Finally, if a government can reform the taxi industry by adjusting the taxi fare, then lowering the taxi fare instead of imposing a strict policy toward on-demand ride services can improve the total social welfare. This paper was accepted by Serguei Netessine, operations management. |
Databáze: | OpenAIRE |
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