Carpool services for ride‐sharing platforms: Price and welfare implications

There has been rapid growth in on-demand ride-hailing platforms that serve as an intermediary to match individual service providers (drivers) with consumer demand (riders). Several major players of this market have introduced carpool services allow passengers heading toward the same direction share a ride at discounted fare. In article, we develop analytical model study pricing issues ride-sharing presence services, and their economical social implications. We show should be provided when its quality and/or pooling efficiency is high. When platform finds it optimal offer option, achieves larger coverage riders are able enjoy more affordable rides without compromising on quality. Our analysis reveals provision benefits general, but may hurt drivers.