Splitting the Fare: Platform Expansion and Strategic Driver Allocation Between Services

• In Event: BEHAVIORAL OPERATIONS MANAGEMENT: Empirical research in people-centric supply chains

Abstract

We examine how the introduction of the adjacent service of food delivery impacts driver behavior on ride-hailing platforms. Using data from a ride-hailing platform that launched delivery in two cities at different times, we apply a quasi-experimental difference-in-differences design. Results show that hybrid drivers who provide both delivery and ride-hailing increase their hours and revenue but shift toward shorter ride-hailing trips. In contrast, dedicated ride-hailing drivers pursue longer, higher-value rides. This emerging segmentation presents new labor supply risks and strategic challenges for platform management as they scale multi-service ecosystems.

Authors

• Sukrit Pal, Iowa State University

• Thu Trang Hoang, University of Texas Arlington

• Michael J Dwyer, Iowa State University

• Christopher S. Tang, Anderson School of Management - University of California Long Beach