Research on Aggregate Mode in Car-hailing Market—-from the Perspective of Compatibility

Abstract

The new aggregate mode has appeared in China's car-hailing market. The aggregate mode allows separate car-hailing firms to join in one single platform and share users and transportation capacity together, which can promote the compatibility level among accessed platforms. This paper builds a duopoly model of the two-sided market of the car-hailing and analyzes the effects of aggregate mode on car-hailing firms from the perspective of compatibility. It is considered in this paper that the market is symmetric and travelers multi-homing while drivers single-homing. The main results indicate that at the early stage of the firms, they tend to be exclusive to build a user base. However, they would adopt the aggregate mode to promote the compatibility level with others when the market is mature.