Competing Platforms and Transport Equilibrium: Evidence from New York City

This paper studies platform competition in the app-based transportation industry. I present a model of competing platforms in transport equilibrium, characterizing analytically the profit-maximizing allocations and prices, and estimate it using high-frequency data on the operations of the two main platforms in New York City. One main issue associated with the growth of these platforms is their impact on traffic volumes. I argue that this is exacerbated by missed economies of density from platform competition. I use the model to simulate the impact of a merger, finding that it would reduce the average number of idle vehicles in the Central Business District by 30%, improving efficiency and reducing vehicle traffic by 12%. I also use the model to study common policies aimed at reducing traffic volumes, such as congestion pricing and entry restrictions. ∗Harvard University, Department of Economics, Littauer Center, Cambridge MA 02138, USA, nicolarosaia@g.harvard.edu I am thankful to my advisors Myrto Kalouptsidi, Robin Lee, Ariel Pakes for constant advice and support, to Giulia Brancaccio for many helpful advices, and to Edward Glaeser, Gabriel Kreindler, Frank Pinter and Allen Zhang for helpful comments.