Market Expanding or Market Stealing? Competition with Network Effects in Bikesharing

Using staggered entry of two dockless bikesharing firms, we find the entrant expands the market for the incumbent. The entry helps the incumbent to serve a greater number of trips, make more bike investment, achieve higher revenue per trip, improve bike utilization rate, and form a wider and more evenly distributed network. The market expansion effect on new users dominates a significant marketstealing effect on old users. These findings, together with a theoretical model that highlights consumer search and network effects, suggest that a market with positive network effects is not necessarily winnertakesall, especially when users multihome across compatible networks.