On the inefficiencies in the multi-platform e-hailing market with impatient customers

In a competitive e-hailing market, each participating platform can only utilize a portion of the total demand (passengers) and supply (drivers). This fragmentation may lead to market inefficiencies. In this paper, we introduce an equilibrium model of the multi-platform e-hailing market considering exogenous passenger demand and vehicle supply, and addressing two types of passenger cancellation behaviors. A queueing model with reneging is incorporated to allow passenger cancellations during matching due to impatience. A utility choice model is incorporated to allow passenger cancellations if they are dissatisfied with the service being provided. We use the model to quantify the effects of fragmentation, examining varying combinations of demand and supply levels, illustrating different market conditions. We investigate multiple scenarios, which include up to 10 symmetrical platforms and asymmetrical duopolies. Additionally, we construct and compare the supply curves of a symmetrical duopoly and an equivalent monopoly. It can be shown that the duopoly will be in the Wild Goose Chase (WGC) state for a broader range of market conditions compared to the monopoly, which gives rise to inefficiencies in a fragmented market.