Talk to be delivered by Prof. Sukrit Pal, Iowa State University 

1 October, 2024, Bengaluru: The Office of Research and Publications (R&P) at IIM Bangalore will host a research seminar on, ‘Efficiency and Driver Behavior in Ride-Hailing Platforms with Adjacent Services: An Empirical Study of the Impact of Food Delivery Introduction’, to be led by Prof. Sukrit Pal, Iowa State University (Production & Operations Management area), at 3.30 pm on 7 October 2024, at Classroom P-22.  

Abstract:  

Problem Definition: To sustain growth as competition intensifies, many ride-hailing platforms introduce adjacent services (e.g., food delivery) seamlessly, expanding the functionality of their mobile app for customers and drivers. However, the driver’s behavior in choosing between incumbent ride-hailing services and new adjacent services is poorly understood in the literature, which motivated the researchers to examine how introducing an adjacent service (food delivery) influences driver behavior.  

Methodology/Results: By analyzing the data obtained from a ride-hailing platform in Vietnam with a new food delivery service introduced in two different cities at different times, the researchers examined the driver’s decision between ride-hailing and food delivery services using the difference-in-difference method with a series of robustness checks. The analyses reveals that, after introducing additional food delivery service option, drivers who provide both services (hybrid drivers) earn 85.8% more in revenue and work 68.9% more hours. It is observed that such effects are heterogeneous across the part-time and full-time hybrid drivers. Additionally, these hybrid drivers tend to select shorter ride-hailing rides (4.6% more trips per hour and 6.9% lower revenue per trip), generating operations area clusters. However, those drivers who remain to provide only ride-hailing services (dedicated drivers) seem to choose longer ride-hailing rides (6.9% fewer trips per hour and 8.5% higher revenue per trip).  

Managerial Implications: The introduction of the adjacent food delivery service can enable the platform to reduce labor supply heterogeneity between part-time and full-time drivers. However, the study predicts shorter ride-hailing requests, a ‘cherry-picking’ behavior, is present among hybrid drivers. At the same time, the researchers find evidence about longer ride-hailing request selection patterns among dedicated drivers. Hence, the study highlights new labor supply risks as the adjacent service introduction can create potential segmentation in the driver pool. 

Speaker Profile: Dr. Sukrit Pal is an Assistant Professor at Iowa State University. He completed his PhD in Operations and Supply Management from the Michigan State University. 

Webpage Link: https://www.ivybusiness.iastate.edu/directory/sukritp/