Paper Number
ICIS2025-2303
Paper Type
Complete
Abstract
Traditional businesses increasingly coexist with digital platforms, yet the implications of their coopetition—simultaneous cooperation and competition—remain underexplored. This paper examines Uber–taxi integration in New York City, where yellow taxis are requested via the Uber app at fares set by Uber’s algorithm. We show that taxis benefit from greater e-hail demand, spillovers to street hails, and higher fares partly driven by surge pricing. By contrast, Uber experiences a decline in trip volumes, reflecting both demand referrals to taxis and substitution towards rival platforms. However, these losses are offset through fare increases enabled by market power. Fare hikes also spill over to Lyft. Overall, yellow taxis’ net revenue increases by 3.8%, while Uber’s rises by 10.7%. These findings highlight the nuanced effects of platform-mediated cooperation: it can generate mutual gains for traditional firms and platforms but may simultaneously reduce consumer welfare through higher prices.
Recommended Citation
Zeng, Maoxia and Li, Zhuoxin (Allen), "Request Taxi Service with Uber? An Empirical Study of Traditional Businesses Partnering with Their Platform Rivals" (2025). ICIS 2025 Proceedings. 19.
https://aisel.aisnet.org/icis2025/sharing_econ/sharing_econ/19
Request Taxi Service with Uber? An Empirical Study of Traditional Businesses Partnering with Their Platform Rivals
Traditional businesses increasingly coexist with digital platforms, yet the implications of their coopetition—simultaneous cooperation and competition—remain underexplored. This paper examines Uber–taxi integration in New York City, where yellow taxis are requested via the Uber app at fares set by Uber’s algorithm. We show that taxis benefit from greater e-hail demand, spillovers to street hails, and higher fares partly driven by surge pricing. By contrast, Uber experiences a decline in trip volumes, reflecting both demand referrals to taxis and substitution towards rival platforms. However, these losses are offset through fare increases enabled by market power. Fare hikes also spill over to Lyft. Overall, yellow taxis’ net revenue increases by 3.8%, while Uber’s rises by 10.7%. These findings highlight the nuanced effects of platform-mediated cooperation: it can generate mutual gains for traditional firms and platforms but may simultaneously reduce consumer welfare through higher prices.
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19-SharingEconomy