Competition equilibrium of ride-sourcing platforms and optimal government subsidies considering customers’ green preference under peak carbon dioxide emissions

Abstract

With the proposal of the “peak carbon dioxide emissions” (carbon peak), committing to carbon emission reduction in the ride-sourcing market has become the focus of the sustainable development of the platform. Under the background of “carbon peak”, this paper constructs a duopoly competition model of ride-sourcing market considering government subsidies and customers' green preference. One platform adopts the self-operated mode of purchasing new energy vehicles (NEVs), and the other platform adopts the franchised mode of driver owned vehicle. We find that: First, while one platform maintains the competitive equilibrium decisions, no matter how the other platform adjusts pricing and fleet size decisions, the equilibrium will be disrupted and profits will be lost. Second, the customers' green preference and subsidy preference are more favorable to the self-operated platform than to the franchised platform. Especially when customers' subsidy preference is weak, the effect of green preference is more obvious. Third, with the increase in the total investment in government subsidies, the optimal ride fare rate of the two platforms will decrease, and the franchised platform will curtail the fleet size. Ultimately, government subsidies will be more conducive to the benefit of the self-operated platform and improve social welfare. Customers’ green preference and government subsidies will both contribute to the goal of carbon peak. The extension part considers the realities of green credit policy and a general case of the ride-sourcing market. This study provides management suggestions for promoting the sustainable development of the ride-sourcing market.