Differential service strategies of ride-hailing platforms for passengers with heterogeneous behaviors

In the ride-hailing market, facing passengers with heterogeneous behaviors, some ride-hailing platforms (e.g., DiDi or Uber) develop a scoring system to provide differential service. To explore the benefits of this differential service, we develop game-theoretic models to capture the interactions among the platform, passengers, and drivers. The results show that the ride-hailing platform always adopts a markup pricing strategy with cost-sharing, regardless of whether the platform adopts differential service. As the loss cost increases, the ride-hailing platform tends to develop a scoring system and serve only passengers with high scores, but this strategic switch may harm both passengers and drivers. Fortunately, the ride-hailing platform can perfectly mitigate the conflict with passengers by adjusting the scoring standard. Furthermore, we extend our baseline model to a three-tiered passenger segmentation, confirming the robustness of our findings and enhancing the practical relevance of our study.