#4801. Differential pricing strategies of ride-sharing platforms: choosing customers or drivers?

July 2026publication date
Proposal available till 27-05-2025
4 total number of authors per manuscript0 $

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Journal’s subject area:
Business and International Management;
Strategy and Management;
Management Science and Operations Research;
Management of Technology and Innovation;
Computer Science Applications;
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Abstract:
Ride-sharing platforms widely use differential pricing strategies to encourage platform participation. However, it remains unclear whether differential pricing strategies in ride sharing are reasonable when users care about price fairness. Platforms must deal with taxi competition, while the supply side contends with government regulation; it is this dilemma that motivates our work. Using a stylized model that includes price fairness, market conditions, and government policies, we consider four ride-sharing platform pricing strategies: uniform pricing, differential customer pricing, differential driver pricing, and bilateral differential pricing. If the maximal number of potential drivers is below certain thresholds, a platform will use differential driver pricing. Conversely, differential customer pricing is optimal when the maximal number of potential drivers is sufficiently large. From the government perspective, when a platform charges customers differently, the government can achieve a win-win solution for sustainable development and market stability by setting a proper taxi rate.
Keywords:
differential pricing; price fairness; ride-sharing platform; two-sided markets

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