On the interplay between pricing, competition and QoS in ride-hailing

On the interplay between pricing, competition and QoS in ride-hailing | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article On the interplay between pricing, competition and QoS in ride-hailing Tushar Shankar Walunj, Shiksha Singhal, Jayakrishanan Nair, Veeraruna Kavitha This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-6238376/v1 This work is licensed under a CC BY 4.0 License Status: Published Journal Publication published 19 Jun, 2025 Read the published version in Dynamic Games and Applications → Version 1 posted 9 You are reading this latest preprint version Abstract We analyse a non-cooperative game between two competing ride-hailing platforms, each of which is modeled as a two-sided queueing system, where drivers (with a limited level of patience) are assumed to arrive according to a Poisson process at a fixed rate, while the arrival process of (price-sensitive) passengers is split across the two platforms based on Quality of Service (QoS) considerations. As a benchmark, we also consider a monopolistic scenario, where each platform gets half the market share irrespective of its pricing strategy. The key novelty of our formulation is that the total market share is fixed across the platforms. The game thus captures the competition between the platforms over market share, with pricing being the lever used by each platform to influence its share of the market. The market share split is modeled via two different QoS metrics: (i) probability that an arriving passenger obtains a ride, and (ii) the average passenger pick-up time. The platform aims to maximize the rate of revenue generated from matching drivers and passengers. In each of the above settings, we analyse the equilibria associated with the game in certain limiting regimes. We also show that these equilibria remain relevant in the more practically meaningful 'pre-limit.' Interestingly, we show that for a certain range of system parameters, no pure Nash equilibrium exists. Instead, we demonstrate a novel solution concept called an equilibrium cycle, which has interesting dynamic connotations---intuitively, the equilibrium cycle represents the limit set of oscillating game dynamics. Our results highlight the interplay between competition, passenger-side price sensitivity, and passenger/driver arrival rates. BCMP queueing network ride-hailing platforms two-sided queues Wardrop equilibrium Nash equilibrium equilibrium cycle oscillatory game dynamics Full Text Additional Declarations No competing interests reported. Cite Share Download PDF Status: Published Journal Publication published 19 Jun, 2025 Read the published version in Dynamic Games and Applications → Version 1 posted Editorial decision: Revision requested 16 Apr, 2025 Reviews received at journal 16 Apr, 2025 Reviews received at journal 15 Apr, 2025 Reviewers agreed at journal 19 Mar, 2025 Reviewers agreed at journal 19 Mar, 2025 Reviewers invited by journal 19 Mar, 2025 Editor assigned by journal 19 Mar, 2025 Submission checks completed at journal 18 Mar, 2025 First submitted to journal 16 Mar, 2025 You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. 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Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-6238376","acceptedTermsAndConditions":true,"allowDirectSubmit":false,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":435813131,"identity":"b3729d52-dc55-45d7-ab12-66052a57347b","order_by":0,"name":"Tushar Shankar Walunj","email":"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAAA70lEQVRIiWNgGAWjYHACNjDJB8QGHwwkGAzAXAPc6nlgWkCk4QwDCQnStDADeRJ4FEOAvUT6swc/9xyWZ5PIPVBsU2BRZ87A/PADQ8Ed3LZI5Jgb9jw7bNgmkZdgnAN0mGUDmzHQR8/waWGT4Dlwm7FNIscArMXgAIMZ0C+H8WhJfyb558Bte7AWC7AW9m8EtCSYSQNtSQRrYQBr4SFgy5k3ZtIyB/4nt/G8MTDsMZCQ3NnMUyyRgEcLezvQYW8OpNn2s+eYGfz4U8dvzt6+8cOHP7i1IAM2SJQwA3ECURqAah8QqXAUjIJRMApGGAAAT2pHJrAIqrIAAAAASUVORK5CYII=","orcid":"","institution":"Indian Institute of Technology Bombay","correspondingAuthor":true,"prefix":"","firstName":"Tushar","middleName":"Shankar","lastName":"Walunj","suffix":""},{"id":435813132,"identity":"d5fe2087-6669-43c3-b463-729907d9d529","order_by":1,"name":"Shiksha Singhal","email":"","orcid":"","institution":"Indian Institute of Technology Bombay","correspondingAuthor":false,"prefix":"","firstName":"Shiksha","middleName":"","lastName":"Singhal","suffix":""},{"id":435813133,"identity":"264a24f1-1884-434a-83da-e733a86623dc","order_by":2,"name":"Jayakrishanan Nair","email":"","orcid":"","institution":"Indian Institute of Technology Bombay","correspondingAuthor":false,"prefix":"","firstName":"Jayakrishanan","middleName":"","lastName":"Nair","suffix":""},{"id":435813134,"identity":"0d56e477-b5d9-4df3-a2ea-4b00b1918db1","order_by":3,"name":"Veeraruna Kavitha","email":"","orcid":"","institution":"Indian Institute of Technology Bombay","correspondingAuthor":false,"prefix":"","firstName":"Veeraruna","middleName":"","lastName":"Kavitha","suffix":""}],"badges":[],"createdAt":"2025-03-16 15:23:06","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-6238376/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-6238376/v1","draftVersion":[],"editorialEvents":[{"content":"https://doi.org/10.1007/s13235-025-00653-3","type":"published","date":"2025-06-19T15:57:47+00:00"}],"editorialNote":"","failedWorkflow":false,"files":[{"id":85231416,"identity":"78d75bf3-6a05-4820-96f4-1a0618498f30","added_by":"auto","created_at":"2025-06-23 16:07:35","extension":"pdf","order_by":1,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":1093438,"visible":true,"origin":"","legend":"","description":"","filename":"DGAAUber.pdf","url":"https://assets-eu.researchsquare.com/files/rs-6238376/v1_covered_602b930a-fba6-4fbb-8ae3-0dc0ab5c934c.pdf"}],"financialInterests":"No competing interests reported.","formattedTitle":"On the interplay between pricing, competition and QoS in ride-hailing","fulltext":[],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":false,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":false,"highlight":"","institution":"","isAcceptedByJournal":true,"isAuthorSuppliedPdf":true,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":true,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"dynamic-games-and-applications","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":false,"externalIdentity":"dgaa","sideBox":"Learn more about [Dynamic Games and Applications](http://link.springer.com/journal/13235)","snPcode":"13235","submissionUrl":"https://submission.nature.com/new-submission/13235/3","title":"Dynamic Games and Applications","twitterHandle":"","acdcEnabled":true,"dfaEnabled":true,"editorialSystem":"em","reportingPortfolio":"Springer Hybrid","inReviewEnabled":true,"inReviewRevisionsEnabled":false},"keywords":"BCMP queueing network, ride-hailing platforms, two-sided queues, Wardrop equilibrium, Nash equilibrium, equilibrium cycle, oscillatory game dynamics","lastPublishedDoi":"10.21203/rs.3.rs-6238376/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-6238376/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"We analyse a non-cooperative game between two competing ride-hailing platforms, each of which is modeled as a two-sided queueing system, where drivers (with a limited level of patience) are assumed to arrive according to a Poisson process at a fixed rate, while the arrival process of (price-sensitive) passengers is split across the two platforms based on Quality of Service (QoS) considerations. 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