When Uber Eats its own business, and its competitors' too: Resource exclusivity and oscillation following platform diversification

Abstract

How will a platform firm's diversification affect its existing business? Using datasets on the rideshare and food delivery businesses in New York City, we find that the launch of Uber Eats reduced Uber's and Lyft's rideshare trip volumes, but these effects were weaker during rush hours. Additional theoretical and empirical analyses suggest that, while platform diversification enables complementors to share some resources across businesses, it may also create opportunities for complementors to oscillate other complementary resources, thereby diverting complementor resources in the existing business from both the diversifying and competing platform firms. Such sharing-enabled resource oscillation may be due to resource exclusivity at the transactional level and the lack of control by platform firms over resources at the organizational level.