Emerging Dynamics in Ridesourcing Platforms

Abstract

Ridesourcing businesses operate virtual marketplaces to which free-lancers supply labour and vehicle capacity. A lack of central control over supply may increase the likelihood that socially undesirable levels of supply are attained. Currently, it is largely unknown how co-evolutionary relationships between decentralised supply and demand affect the ridesourcing market equilibrium. To this end, we propose a day-to-day model that accounts for multiple decentralised processes occurring on both sides of the market: (i) initial exposure to information about the platform, (ii) a long-term registration decision, and (iii) daily platform utilisation decisions, subject to day-today learning based on within-day matching outcomes. We construct a series of experiments to investigate the effect of different pricing variables and the availability of travellers and workers on ridesourcing system performance. Our results provide indications that regulating the commission fee may be highly beneficial to travellers and drivers, while inducing only a marginal cost for the platform.