Research On Passenger Behavior Management And Pricing Strategies Of Ride-hailing Platforms

With the rapid development of information technology,the ride-hailing industry has risen rapidly and arisen some large ride-hailing platforms,such as:Di Di,Uber and so on.However,coordinating the interests of passengers and drivers has become a major challenge for the operation of these ride-haling platforms.On the one hand,the uncivilized behavior of passengers would harm the interests of drivers,thus it is necessary to explore the methods of passenger behavior management to alleviate the conflict between drivers and passengers and improve the profitability of the platform.On the other hand,ride-hailing platforms will face complex and changing operating environments,such as privacy regulations implemented by the government and fierce competition with traditional cruisers,which makes it important to develop different pricing strategies in different scenarios.In this paper,we analyze the strategic interactions among the various participants in the ride-hailing market from the perspective of platforms’ operation,taking into account the characteristics of passengers and drivers,and establishing game models.Firstly,the impact of incentive strategies on passenger behavior is discussed under the light and heavy asset modes,thereby exploring the methods of passenger behavior management,and aiming at alleviating driver-driver conflicts and shaping a civilized riding environment.Secondly,privacy regulation and price competition problem with traditional taxi are discussed separately to provide theoretical support for the operation management and revenue enhancement of ride-hailing platforms.The main research work is as follows:(1)We study the problem of passenger behavior management under the asset-light mode.First,we consider the heterogeneity of passenger behavior,in which uncivilized behavior will bring losses to drivers,and establish game models to analyze the pricing problem of ride-hailing platforms.Second,we explore an ideal situation in which all passengers are civilized,and solve the pricing problem of the platform,thus the dilemma of civilization is found.For solving the dilemma and reshaping a civilized ride environment,we propose the price incentive strategy and the quality incentive strategy to incentive passengers to become civilized,and furthermore explore the impact of implementing these two strategies.Between them,the platform with price incentive strategy charges different fares for the two types of passengers,while the platform with the quality incentive strategy provides different service qualities for the two types of passengers.Finally,we solve the strategy selection problem of the platform through comparative analysis.Our research reveals that price incentive strategies can perfectly resolve the dilemma of civilization,creating a civilized market with “triple win” by subsidizing passengers and reducing drivers’ wages.Quality incentive strategies can only partially address this dilemma,possibly leading to a civilized market with“triple win.” Comparative analysis indicates that when the passenger’s effort cost is low,quality incentive strategies outperform price incentive strategies.(2)We study behavioral management of passengers under the asset-heavy mode.Under the heavy-asset mode,the ride-hailing platform will purchase vehicles in the first period and set the service price in the second period.Therefore,based on the previous analytical framework,the single-period model under the light-asset mode is extended to a two-period model,and thus we analyze the impact of different supply modes on passenger behavior management.Similarly,we first develop a basic model under the heavy asset mode,then analyze an ideal situation,and find that the dilemma of civilization still exists.Next,We analyze the effects of price incentive strategy and quality incentive strategy,furthermore explore the strategy selection problem of platforms.Finally,we compare and analyze the effects of the two supply modes on passenger behavior management methods.The research finds that the mainly findings under the light-asset mode remain consistent.The difference lies in that,the platform’s choice of incentive strategy under the heavy-asset mode not only depends on the passenger’s effort level and service quality but also on the purchasing costs of a vehicle.Furthermore,under the light-asset mode,the platform’s incentive strategies are more effective,In addition,adopting incentive strategies in the light asset mode is more effective and results in more significant profit growth compared to using the same strategy in the asset mode.(3)We investigate the pricing problem of ride-hailing platforms under privacy regulation is studied.Considering the impact of information collection on passengers and platforms,we develop a Stackelberg game model under the scenario of no privacy regulation and derive the equilibrium price of ride-hailing service.Based on this model,by considering the impact of privacy regulation on each participant in the ride-hailing market,a new game model is re-established to analyze the pricing problem of ride-hailing platforms under privacy regulation.Finally,we compare the equilibrium solutions of the two scenarios from four aspects: passengers,drivers,platforms,and the government,to analyze the impact of privacy regulation on the ride-hailing market.The research finds that the privacy regulation encourages platforms to abandon full coverage pricing strategies and adopt partial coverage pricing strategies.When the degree of advertising interference is low,the privacy regulation can use the self-interest of passengers to alleviate the negative impact of platform information collection.Otherwise,it seems somewhat redundant.When passengers are moderately disturbed by advertisements,the privacy regulation sacrifice the interests of three participants in the ride hailing market(i.e.customers,drivers,and platforms)to reduce the social costs of platform information collection behavior.Regulatory agencies should only implement this regulation when the level of externalities is sufficiently high.(4)We investigate the pricing problem of ride-hailing platforms in a competitive environment.First,we consider the difference between long and short distance passengers and analyze the problem of passengers’ travel choice.Second,we construct a Stackelberg game model to explore the price competition between ride-hailing platforms and taxi such that the equilibrium service price of ride-hailing platforms is determined.Finally,based on sensitivity analysis,we discuss the impact of changes in important parameters on the taxi market.The results show that cruising cars may be driven out of the taxi market.To promote the development of the taxi industry,ride hailing platforms need to set high starting prices and unit mileage prices,thus forming a market of “short-distance competition,long-distance competition”.Sensitivity analysis finds that an increase in relative service quality would increase the revenue of ride hailing platforms and cruising vehicles.The incentive strategy proposed in this paper helps ride-hailing platforms to manage passenger behavior,thus easing driver-passenger conflicts and shaping a civilized ride environment.At the same time,the study of pricing strategy helps platforms to deal with different market environments and ensures that ride-hailing platforms can realize stable profitability.