Drivers, Riders, and Service Providers: The Impact of the Sharing Economy on Mobility

Saif Benjaafar, Harald Bernhard, Costas Courcoubetis, Michail Kanakakis, Spyridon Papafragkos

Research output: Contribution to journalArticlepeer-review

10 Scopus citations


It is widely believed that ride sharing, the practice of sharing a car such that more than one person travels in the car during a journey, has the potential to significantly reduce traffic by filling up cars more efficiently. We introduce a model in which individuals may share rides for a certain fee, paid by the rider(s) to the driver through a ride-sharing platform. Collective decision making is modeled as an anonymous nonatomic game with a finite set of strategies and payoff functions among individuals who are heterogeneous in their income. We examine how ride sharing is organized and how traffic and ownership are affected if a platform, which chooses the seat rental price to maximize either revenue or welfare, is introduced to a population. We find that the ratio of ownership to usage costs determines how ride sharing is organized. If this ratio is low, ride sharing is offered as a peer-to-peer (P2P) service, and if this ratio is high, ride sharing is offered as a business-tocustomer (B2C) service. In the P2P case, rides are initiated by drivers only when the drivers need to fulfill their own transportation requirements. In the B2C case, cars are driven all the time by full-time drivers taking rides even if these are not motivated by their private needs. We show that, although the introduction of ride sharing may reduce car ownership, it can lead to an increase in traffic. We also show that traffic and ownership may increase as the ownership cost increases and that a revenue-maximizing platform might prefer a situation in which cars are driven with only a few seats occupied, causing high traffic. We contrast these results with those obtained for a social welfare-maximizing platform.

Original languageEnglish (US)
Pages (from-to)123-142
Number of pages20
JournalManagement Science
Issue number1
StatePublished - Jan 2022

Bibliographical note

Funding Information:
History: Accepted by Charles Corbett, operations management. Funding: This research was, in part, funded by the U.S. National Science Foundation [Grant SCC-1831140] and by the Singapore Ministry of Education [Grant T2-1712]. Supplemental Material: The online appendix is available at

Publisher Copyright:
© 2022 INFORMS Inst.for Operations Res.and the Management Sciences. All rights reserved.


  • Equilibrium analysis
  • Nonatomic games
  • Ride sharing
  • Sharing economy
  • Social welfare
  • Transportation


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