MoMaS: Two-sided Mobility Market Simulation Framework for Modeling Platform Growth Trajectories

Abstract

Mobility platforms such as Uber and DiDi have been introduced in cities worldwide, each demonstrating varying degrees of success, employing diverse strategies, and exerting distinct impacts on urban mobility. We have observed various growth trajectories in two-sided mobility markets and understood the underlying mechanisms. However, to date, a realistic microscopic model of these markets including phenomena such as network effects has been missing. State-of-the-art methods well estimate the macroscopic equilibrium conditions in the market, but struggle to reproduce the individual human behavior behind and complex growth patterns sensitive to platform strategy and policies.

To bridge this gap, we introduce the MoMaS (two-sided Mobility Market Simulation) framework to represent growth mechanism in two-sided mobility markets based on the realistic behavior adjustment of drivers and travelers reactive to platform strategy. In the proposed framework, traveler and driver agents learn the platform utility from multiple channels: their own experience, peers’ word-of-mouth, and the platform’s marketing, all-together constituting the agent’s perceived utility of the platform. Each of these channels is modeled and updated by our S-shaped learning model day-to-day which stabilizes, and at the same time, remains sensitive to the system changes. The platform can simulate any strategy on five levers: trip fare, commission rate, discount rate, incentive rate, and marketing.

While detailed empirical data and actual strategies for platform growth remain largely unknown, MoMaS allows to reproduce series of plausible growth trajectories that were previously unattainable. The framework facilitates the modeling of individual-level behaviors such as reluctance, neutrality, and loyalty, alongside aggregate-level dynamics like critical mass, bandwagon effects, and both positive and negative cross-side network effects.

We illustrate the capabilities of MoMaS through an extensive set of real-world experiments. Our results demonstrate that once the platform acquires critical mass, it triggers a significant positive cross-side network effect, accelerating growth. However, this can be reversed if a negative cross-side network effect is triggered, leading to the collapse of the platform. MoMaS is applicable for real-sized problems and available on public repository along with reproducible experiments.