The ride-sourcing industry: Status-quo and Outlook

Kurzfassung

Ride-sourcing, the use of private cars to provide on-demand mobility services has been thrilling entrepreneurs, politicians, urban planners and venture capitalists since it first appeared in San Francisco around the year 2010. As yet, its impact on urban mobility is unclear, as is the outlook for TNCs that aspire to expand in cities all around the world within the last decade. We take a look behind the development of ride-sourcing in three case cities (San Francisco, Mexico City, and Paris) to understand what facilitates their growth, and how politicians regulate TNCs in different countries. We then conduct an economic analysis to consider the future market for ride-sourcing, and in order to discuss the current expansionary strategy of TNCs. Our research shows that TNCs tailor their strategies to local contexts, but always give first priority to establish in the market, positioning themselves on gray regulatory areas if necessary. They do so even if they face significant resistance from cities, taxi drivers and other groups and despite of being unprofitable. Our economic model provides a possible explanation for this: We show that the market for ride-sourcing will lead to monopolistic situations (if it is not regulated), when autonomous vehicles become available. We hence conclude from our analysis that cities should be watchful when TNCs start to establish, and that they should seek for a regulatory framework in order to maximize the social welfare.