APP-BASED TRANSPORTATION SERVICES AND THEIR PRICING MODELS

Abstract

The swift growth of the transportation app services like Uber, Lyft, Ola, Didi and Grab has rendered a major change in the system of urban mobility systems around the world. Such platforms use algorithm pricing models such as dynamic, surge, subscription-based pricing and shared ride pricing to coordinate demand supply to optimize operational efficiency and availability of services. The systematic review is a compilation of academic literature that has been released to analyze the effects of these pricing models on passengers, drivers, competition in the marketplace, and regulations. Results suggest that dynamic and surge pricing enhance ride availability and platform efficiency, but create issues of fairness in fares, income volatility among drivers, and fairness in access to the price-sensitive users. Subscriptions and shared ride models have a prospect of being cost effective and retaining customers, but they are not unused. The inconsistencies in regulations also make it more difficult to sustain the app-based transport services. The research finds a gap in the study on the long-term behavioral impacts, the driver welfare, and the comparative effectiveness of the pricing strategies, which can inform policymakers, operators of the platform, and future academic studies.