The influence mechanisms of platform on supply-side behaviour: a longitudinal investigation on taxi drivers' adoption of a ride-hailing app

Abstract

This paper investigates the influence mechanisms of platform on supply-side behaviour. Specifically, we examine taxi drivers' adoption of Didi Chuxing, a dominating ride-hailing app in the taxi industry in China. We address the influence mechanisms of the platform through reducing information asymmetry, reducing information search cost and matching the supply side with the demand side. By using a panel regression model, we find that the app exerts its influence on taxi drivers' offline operational behaviour mainly through the mechanisms of reducing information search cost on drivers' best driving route, and matching drivers with passengers in non-rush-hour periods and urban areas. Although we do not find a statistical support of the app's mechanism of reducing information asymmetry on passengers' trips, we believe that the mechanism is still worthwhile exploring further in other research settings in the future. The findings in this paper are essential to understand what the platform itself plays a role in influencing platform players' behaviour. Theoretical and practical implications are discussed.