Gender-related operational issues arising from on-demand ride-hailing platforms : safety concerns and system configuration

Abstract

Female user (driver and rider) safety is a serious concern for ride-hailing platforms. One way to address this concern is to migrate from the traditional “pooling” system that matches riders with drivers without considering gender to a “hybrid” system with a “female-only” option. Will such a hybrid system result in a win-win-win outcome for all involved parties (riders, drivers, and the platform)? To answer this question, we investigate the performance of the two operational systems: a pooling system and a hybrid system. For each system, we analyze a two-stage queueing game to determine the equilibrium “joining” and “participating” behavior of riders and drivers, and then derive the platform's optimal pricing and wage decisions. We posit a mismatch cost incurred by a safety-concerned female user when she is matched with a male counterpart in a ride. By comparing the equilibrium outcomes associated with the pooling and the hybrid systems, we draw the following conclusions: when safety-concerned female users’ mismatch cost is above a certain level, switching from a pooling system to a hybrid system can result in a win-win outcome for safety-concerned female users and the platform. However, male and safety-unconcerned female users might be worse off due to this change in the system configuration. Our results also help us to rectify some of our intuitions about these two systems. One, in the pooling system, reducing the mismatch cost associated with safety-concerned female drivers may not lead to more female riders joining the pooling system, even though it boosts the platform's profit in general. Two, in the hybrid system, it is not necessary for female riders to pay a higher price when they opt for female drivers instead of male drivers. We also relate our results to certain system configurations adopted by various ride-hailing platforms to address female safety concerns in different countries.