Abstract:

In recent years， the open platform strategy has been adopted by the incumbent ride-hailing platform in some cities in China， i.e.， passengers can select the services provided by the drivers from the new ride-hailing platform through the incumbent ride-hailing platform’s APP. It is an important research topic whether the incumbent ride-hailing platform should adopt the open platform strategy with respect to different market environments in different cities.In this paper， a transportation system with an incumbent ride-hailing platform and a new ride-hailing platform is considered， where the supplement of the incumbent ride-hailing platform’s drivers are not sufficient and the new ride-hailing platform’s drivers are sufficient. The models for maximizing profits of the incumbent platform and the new platform are constructed with regard to the competition mode （the incumbent platform does not adopt the open platform strategy or the new platform does not join the open platform） and cooperation mode （the incumbent platform adopt the open platform strategy and the new platform joins in）. Then， by solving the models， the optimal prices of the two platforms under competition mode and cooperation mode are obtained. Further， by comparing the profits of platforms under different modes， the optimal strategy of the incumbent platform and the new platform is analyzed under different market scenarios. On this basis， how several factors affect optimal prices， demands， supplies， and profits of the two platforms is examined. Finally， some numerical studies are conducted to show the impacts of passenger market size and different optimal strategies on social welfare.Several important results are shown through the theoretical analysis. First， if the one-off investment cost of the incumbent platform and that of the new platform are both low， or the incumbent platform’s potential market size is large， the profit of the incumbent platform under cooperation mode is higher than that under competition mode， then the incumbent platform should adopt the open platform strategy； On the contrary， the profit of the incumbent platform under competition mode is higher than that under cooperation mode， then the incumbent platform should not adopt the open platform strategy. Second， the decision results that maximize the platform’s profits are not always consistent with those that maximize social welfare. Thus， the government should take appropriate measures to guide platforms’ decisions.

Key words: ride-hailing platform, open platform, investment costs, market size, social welfare