Airport pricing strategies for ride-hailing services : a game-theoretic analysis

Abstract

Ride-hailing services (e.g., Uber and DiDi) have significantly transformed airport ground transportation, thereby impacting airport revenues. In the past, airports primarily relied on parking and car rental services to generate stable non-aeronautical revenue. However, as a growing number of passengers have shifted to ride-hailing, these revenue streams have shown a marked decline. In response to this pressure, airports must reconsider their ground transportation pricing strategies. One approach is to directly impose charges on ride-hailing companies to compensate for revenue losses, though such a strategy may suppress related travel demand. Another approach involves making strategic investments to enhance ride-hailing operational efficiency and subsequently imposing reasonable access fees, thereby achieving revenue growth. To systematically evaluate the impacts of different strategies on airport revenues and social welfare, this study develops a two-stage game-theoretic model involving the airport and the ride-hailing company (RHC). The model is used to identify the airport’s optimal strategies and to propose corresponding government regulatory policies. The results indicate that when the cost of improving ride-hailing operational efficiency is relatively low, the airport can achieve a "win-win-win" situation for the airport, the RHC, and passengers by enhancing ride-hailing operational efficiency while charging fees. Conversely, when the cost of operational efficiency improvement is high, the airport tends to adopt direct charging strategies to secure revenue streams. In this case, although airport profitability is maintained, overall social welfare may decline. If the government aims to maximize social welfare, fiscal subsidies may be necessary to incentivize airports to adopt the strategy of efficiency improvement combined with reasonable charges.