The Influence of Commission Rates on Pricing Strategy of Online Ride-Hailing Platform

Authors

  • Qi Duan China National Institute of Standardization, Beijing 100191, China

Abstract

Based on the analysis of the commission model of the online ride-booking platform, this paper establishes a bilateral market model of the platform that charges the transaction amount of bilateral users according to the size of the commission, and analyzes the influence of the proportion of the commission on the platform pricing and platform revenue under the three market structures of platform monopoly, single entry and multiple entry of competitive platform enterprises. The study found that with the increasing commission proportion, monopolistic or competitive platforms tend to attract users to their registered platforms and ride-hailing services by subsidizing consumers. Monopolistic platforms will reduce the price of value-added services and maximize their own profits by increasing the demand for value-added services and off ering higher commission. However, regardless of whether the enterprises are either single or multi-party, competitive platforms tend to lower the service price in order to increase the commission rate and the demand for value-added services, although higher commissions will reduce the total revenue of the platforms.

Keywords: online ride-hailing platform, pricing strategy, commission proportion

Cite As

Q. Duan, "The Influence of Commission Rates on Pricing Strategy of Online Ride-Hailing Platform",
vol. 30 no. 4, pp. 255-259, 2022.

 

 

Downloads

Published

2022-07-01

Issue

Vol. 30 No. 4 (2022): International Journal of Engineering Intelligent Systems

Section

General Submission

License

The submission of a paper implies that, if accepted for publication, it will not be published elsewhere in the same form, in any language, without the prior consent of the publisher. Before publication, authors are requested to assign copyright to CRL Publishing Ltd. This allows CRL to sanction photocopying, and to authorize the reprinting of issues or volumes according to demand. Authors' traditional rights will not be jeopardized by assigning Copyright in this way, as they retain the right to reuse the material following publication, and to veto third-party publication.