On-demand ride service platform with differentiated services

The rapid growth of on-demand ride service platforms has made it increasingly important for these platforms to efficiently match services by understanding driver characteristics and consumer preferences. This paper aims to investigate the pricing strategy by considering the impact of consumer prefer...

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Bibliographic Details
Published in:PloS one 2024-01, Vol.19 (1), p.e0296732-e0296732
Main Authors: Ma, Lina, Tao, Zhijie, Wei, Qiang
Format: Article
Language:English
Subjects:
Competitive advantage
Consumer Behavior
Consumer preferences
Customer satisfaction
Customer services
Decision making
Evaluation
Heterogeneity
Methods
Mobile applications
Participation
Platforms
Prices
Quality of service
Supply & demand
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Summary:The rapid growth of on-demand ride service platforms has made it increasingly important for these platforms to efficiently match services by understanding driver characteristics and consumer preferences. This paper aims to investigate the pricing strategy by considering the impact of consumer preference heterogeneity and the different service types offered by drivers. The findings of this study reveal the need for the platform to strike a balance between service cost and the benefits of high-quality drivers, which can be referred to as the "cost-performance ratio". If the "cost-performance ratio" that attracts high-quality drivers is high, the platform will attract high-quality drivers or drivers of all types to participate while offering differentiated services. Otherwise, the platform will only provide services through low-quality drivers. Furthermore, the platform will also consider when to offer differentiated services based on network externalities and service quality. When the network externalities of the two types of services are similar, the platform will differentiate them based on service quality differences. Overall, considering consumer preference heterogeneity, drivers of service types, and network externalities, this paper provides guidance for platforms to make optimal decisions that enhance their service offerings and improve overall customer satisfaction.
ISSN:1932-6203
1932-6203
DOI:10.1371/journal.pone.0296732