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Competition and Cooperation in Ride-Sharing Platforms: A Game Theoretic Analysis of C2C and B2C Aggregation Strategies

Author

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  • Li Hou

    (School of Economics and Management, Ningbo University of Technology, Ningbo 315211, China
    School of Economics and Management, Dalian University of Technology, Dalian 116024, China)

  • Shidao Geng

    (School of Economics and Management, Ningbo University of Technology, Ningbo 315211, China)

  • Wenjie Kong

    (School of Economics and Management, Ningbo University of Technology, Ningbo 315211, China)

Abstract

The aggregation of ride-sharing platforms has forced traditional ride-sharing platforms to decide whether to join or leave these emerging platforms. This study presents a stylized model analyzing the demand, supply, and profit of two self-operated platforms, C2C platforms (such as DiDi and Uber) and B2C platforms, considering aggregation platform awareness and commissions. The study investigates the conditions under which the self-operated platforms should employ the entry strategy based on the optimization method and Cournot game theory, as well as exploring the reasons why self-operated platforms choose to withdraw after joining. The results show that in order to avoid competition, B2C platforms adopt an entry strategy, while C2C platforms adopt a non-entry strategy. Only during the off-peak period, when the awareness of the aggregation platform is very high and the level of competition between the two types of platforms is very intense, will both types of platforms adopt an entry strategy, but C2C platforms may experience a significant loss of market share, leading to a decline in social welfare. Furthermore, even if the self-operated platform chooses to withdraw, social welfare will still increase if the two self-operated platforms adopt the best strategy. The study contributes to sustainable development by promoting efficient resource allocation, reducing redundant competition, and improving overall market efficiency, thereby fostering a more sustainable urban transportation system.

Suggested Citation

  • Li Hou & Shidao Geng & Wenjie Kong, 2025. "Competition and Cooperation in Ride-Sharing Platforms: A Game Theoretic Analysis of C2C and B2C Aggregation Strategies," Sustainability, MDPI, vol. 17(2), pages 1-32, January.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:2:p:398-:d:1561812
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    References listed on IDEAS

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