Competing Platforms and Transport Equilibrium

About this event

I study whether platform competition in ride-hailing generates waste and whether efficiency can be enhanced by consolidating competing networks, considering the tension between market power and network economies. I construct a comprehensive dataset documenting the operations of two large platforms in New York City and use it to discipline a spatial equilibrium model of ride-hailing markets where platforms set prices strategically. Comparing the status quo with counterfactuals, I find that market power and missed network economies generate a waste of 9% and 15% of driver hours, respectively. Consolidation achieved through a merger would improve efficiency but adversely affect riders through higher prices, especially in high-density areas. In contrast, removing barriers to simultaneous multi homing would improve efficiency and lead to lower prices, higher surplus for riders, lower traffic, and higher profits for platforms.