A two-period game-theoretical model for heterogeneous ride-sourcing platforms with asymmetric competition and mixed fleets

Abstract

In the current ride-sourcing market, significant differences generally exist among various platforms: market share, market position, and vehicle type. Most previous studies focus on symmetric duopoly competition and assume that platforms have similar market power and size. However, much less is known about the operation strategy and market outcome under platform heterogeneity and asymmetry. This paper proposes a two-period Stackelberg-based model to formulate the competition between two asymmetric ride-sourcing platforms and captures the differentiated decision-making sequence and driver utilities under mixed fleets. In the proposed model, the established leader platform operates a mixed fleet of electric vehicles (EVs) and gasoline vehicles (GVs), while the emerging follower platform adopts an all-EV fleet. The mathematical mechanism of how the follower's and leader's decisions impact the demand and supply is analytically derived. It is found that the influence path of the leader's pricing on the supply can be divided into direct and indirect ways. In some cases, the leader can utilize the leadership position to promote the electrification of ride-sourcing services. The impact of potential EV and GV drivers on the platforms' optimal strategies and the surplus of passengers and drivers are also examined. We show that more potential EV drivers benefit both platforms, while fewer potential GV drivers are only conducive to the follower. Moreover, two extended models associated with entry deterrence, order-based wage, and additional profit are developed. The deterrence strategy of the leader platform indirectly accelerates ride-souring electrification and significantly reduces passengers' average waiting time. The economic analysis gains managerial insights into platform operations on the realistic asymmetric ride-sourcing market under transportation electrification.