Differentiation Pricing,Externality And Regulation Of The Ride-sharing Market

The rapid development of the sharing economy has become the new engine of China’s current economic growth.Among them,the network car is a typical representative of the sharing economy,and it is also one of the earliest shared economic models in China.By effectively integrating social idle vehicles and making full use of the people’s scattered time,it can improve the efficiency of taxis and alleviate the problem of "difficult to hit a car" to a certain extent.Now it has become a powerful complement to urban public transport.However,with the rapid expansion of the ride-sharing market,a series of problems have also attracted the attention of the regulatory authorities.In July 2016,the“New Policy of Ride-hailing Regulations"stipulated that the network car platform should implement the market price,and give the local government the right to control the price.At the same time,the conditions for the entry of drivers and vehicles were clearly defined,and the essence was to supervise the quantity of the net car.The introduction of this policy has caused a lot of controversy.Therefore,answering the question of whether to supervise the ride-sharing market and how to supervise it is of great significance to the steady development of the ride-sharing market and the entire sharing economy.Due to price supervision,quantity supervision is common means of supervision in relevant departments.Therefore,this paper focuses on the analysis of price supervision and quantity supervision in the ride-sharing market.The market is the most effective way to allocate resources,but if platform manufacturers abuse market power in the process of independent pricing,resulting in a decrease in social efficiency and consumer welfare,they should be subject to prnce regulation.The ride-sharing market is highly concentrated,and the network car platform can use differentiated pricing to achieve its specific goals.Due to the shortage of supply during the peak period,the ride-sharing platform usually adopts the Surge Pricing strategy to alleviate the shortage through short-term price increases,but since the ultimate goal of platform manufacturers is to pursue profits,differentiation pricing may become a tool for its abuse of the market.Therefore,this paper intends to answer the question of whether or not to deal with price regulation by analyzing the differential pricing strategy commonly used in the network car platform which is called Surge Pricing.Based on the typical facts of the ride-sharing market,this paper s platform-led mechanism and user-volunteered mechanism that can be implemented by a platform manufacturer with both market monopoly status and"economic planner capability.Comparing the difference between profit and transaction volume under the two mechanisms,it is concluded that When the seller’s cross-network externality is greater than the buyer’s cross-network externality,the platform manufacturer chooses user-volunteered mechanism can automatically achieve social efficiency;when the seller’s cross-network externality is less than the buyer’s cross-network externality,the platform faces the efficiency and profit choices.Manufacturers which pursuing profits may abuse market power and sacrifice efficiency.For the ride-sharing platform,due the number of passengers is much larger than the number of drivers,the increase of the number of passengers has less impact on the driver’s utility,and it means the driver’s cross-network externality is small.Therefore,the platform may sacrifice efficiency to obtain profits.This is an expression of abuse of market power and can provide a basis for government price regulation.Since the network car belongs to the shared transportation field,alleviating traffic congestion is one of the government’s policy objectives of introducing the network car.Since the network car will occupy the road resources,if the popularity of the network car increases the degree of urban traffic congestion,that is,it has a serious negative impact on urban traffic,then the government needs to intervene in the quantity supervision of the ride-sharing platform.Therefore,this article mainly answers the question of whether or not to supervise network car by judging whether the it has an external influence on urban traffic.In this paper,using the panel data of 30 large and medium-sized cities from 2014 to 2017,the research results of the difference in differences-propensity score matching(PSM-DID)show that that the negative impact of the demand transfer effect of the ride-sharing and the"pseudo-sharing" component on city traffic are greater than the positive impact brought by the substitution effect.The final manifestation is that the popularity of the network car has increased the congestion delay index,which has aggravated traffic congestion,thus providing a basis for the quantity supervision of the network car market.Through the analysis of the above two aspects,this paper believes that the current implementation of the network new car policy is necessary and effective,but there are still some unreasonable points.This paper treats the platform as the key regulatory target and puts forward policy recommendations for rational supervision of the sharing economy to achieve high-quality development from the three aspects of platform,vehicles and drivers.