Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments July 26, 2022 erstellt
Description:
The introduction of a new product to existing product lines typically gives rise to two opposing effects to the firm – market expansion (e.g. obtain more market shares from competitors or create new demand) and cannibalization (e.g. competition with other products offered by the same firm). However, in a multi-sided network, effects of new product introduction may become more substantiated or complex due to network effects. In this study, we consider the introduction of carpool rides on a ride-hailing app and evaluate the causal impacts on both riders’ and drivers’ welfare. We use a unique and proprietary dataset with fine-grained trip-level information provided by the leading ride-hailing platform Didi Chuxing and exploit a natural experiment of the introduction of carpool rides on this platform. We estimate the economic impacts on both riders and drivers, including earnings, working hours, travel distance, spending and usage intensity, and behavioral changes such as changes in travel patterns due to the introduction of carpooling. Our study provides empirical evidence that DiDi Carpool significantly increases overall spending, orders, and travel distance and reduces unit cost for riders, and drivers’ earnings and working hours also increase. We also show the existence of cannibalization effects between DiDi Carpool and DiDi Express that riders’ spending on and usage of DiDi Express decline after the launch of DiDi Carpool. Meanwhile, Carpooling services improve the platform’s efficiency by reducing the geographic dispersion of drivers’ pick-up locations and encourage riders to explore a wider range of city landscapes. Finally, we discuss heterogeneous effects on part-time and full-time drivers. We are among the first studies estimating the cannibalization effects of lower-tier products on a sharing economy platform and provide insights for platform companies on how a new product introduction affects their ecosystems and revenues