A Study On Pricing Strategy For Platform-based Car Rental Companies

Car rental makes people’s travelling more convenient and people gradually accept this lifestyle. On the other hand, Car rental reduce urban traffic congestion and environmental pollution. In the early stage of car rental history, there only have two parties in the car rental market:the car rental company and the user, and the car rental company only provide leasing services to users. In recent years, with the development of Internet technology and platform business model, a large number of car rental company based on platform business model were established in car rental market, such as wedding-car leasing platform. For these car rental companies, They all have one thing in common:platform features. These companies as a platform not only connect users, but also connect advertisers who directly or indirectly provide products and services for users, and a reasonable price strategy is necessary for car rental companies. In the circumstances, we take a study on pricing strategy for platform-based car rental companies from the perspective of two-sided market, and giving policy advice on promoting the development of car rental companies.In this paper, we mainly focus on the service quality and advertising quality of car rental companies, platform pricing theory and methods, and carry out research on two types of car rental companies which have platform features. The main research contents and conclusions are:(1) Using dynamic modeling methods, we build a Dynamic Game Model to investigate the trade-offs of pricing decision and service quality. The results show that the wedding-car leasing platform’s optimal service quality was positively correlated with the cross-network externalities on both sides of the platform and the number of wedding car in wedding ceremony. And the wedding-car leasing platform’s optimal pricing for users was positively correlated with the cross-network externalities on both sides of the platform, but has no relationship with the number of wedding car in wedding ceremony.(2) Using a Dynamic Game Model, we investigate the trade-offs of pricing decision and advertising quality. The results show that the car rental platform’s optimal advertising quality was positively correlated with the cross-network externalities on both sides of the platform and the advertising quality’s positive impact on advertisers, but was negatively correlated with the advertising quality’s negative impact on users. And the car rental platform’s optimal pricing for users was negatively correlated with the user-generated cross-network externalities and the advertising quality’s positive impact on advertisers, but was positively correlated with the advertising quality’s negative impact on users, and the relationship with advertiser-generated cross-network externalities need to consider the size of overall utility of platform which contributed by advertising quality.