On-demand ride-hailing platforms under green mobility: Pricing strategies and government regulation

This study examines the impact of regulatory policies governing the minimum share of electric vehicle miles traveled (eVMT) on ride-hailing platforms, consumers, and drivers, as well as the optimal pricing strategy for ride-hailing platforms. We devised a two-stage model to elucidate the dynamics among the government, the platform, consumers, and drivers. Our findings demonstrate that under a laissez-faire policy, platforms impose higher prices for green ride services and lower prices for basic ride services, whereas an active intervention policy leads to higher prices for basic ride services upon exceeding a policy standard threshold. Furthermore, in the absence of policy intervention, platforms lack the incentive to facilitate the transition from fuel vehicles (FVs) to electric vehicles (EVs) when the proportion of EVs on the platform is low. Active intervention policies mitigate environmental damage, enhance consumer surplus, and reduce platform profits and driver welfare. Well-designed active intervention policies yield greater social welfare than laissez-faire policies, which underscores the importance of active government regulation.