Competition and coopetition in asymmetric ride-hailing markets

This paper studies coopetition in ride-sourcing markets where a dominant platform allocates passenger demand to a rival's fleet for a revenue share. Analyzing an asymmetric duopoly, we compare a competitive scenario of indpendent operations with a coopetitive scenario where the rival simultaneously serves its and the allocated demand. Our findings reveal that both platforms are either both in the ‘Wild Goose Chase’ (WGC) or non-WGC regime under coopetition, if the non-WGC condition holds independently. Furthermore, a ‘win-win’ outcome is most likely when driver supply is scarce but passenger demand is high. Moreover, the distribution of partnership benefits is often asymmetric, typically favouring the weaker platform and its drivers, while the dominant platform′s profits may decrease. Finally, a merger scenario, where the partner ceases independent operations, yields lower profits and social welfare compared to the coopetitive scenario. These findings offer insights for enabling mutually beneficial coopetition and improving social welfare.