The Rise of Monopolistic Rideshare Companies in Asia: How Ride Hailing Companies’ Market Control Impacts Drivers

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Social Impact Research Experience (SIRE)
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gig economy
rideshare
ride hailing
two-sided markets
China
Singapore
competition
merger
monopoly
DiDi
Grab
insurance coverage
diversification
government regulation
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Business Administration, Management, and Operations
Insurance
International Business
Labor Economics
Technology and Innovation
Transportation
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Abstract

Having undergone mergers with Uber China and Uber Southeast Asia in the past few years, DiDi and Grab now hold over 90% and 80% of the market shares in China and Singapore. This market control has allowed them to dominate the rideshare industry in the two countries, and this paper examines the impact of Grab and DiDi’s monopolistic power on rideshare drivers. Specifically, this research considers changes to both licensure requirements, pricing policies, commission rates, insurance coverage, and CSR programs as well as long-term corporate objectives and strategies following the merger. In order to understand the implications of DiDi and Grab’s decrease in competition and greater market control, this research draws from existing scholarly research, DiDi and Grab’s policies and terms of use, news articles, reports, government documents, and most importantly, qualitative interviews with employees at DiDi and Grab. The paper concludes that despite changes in pricing, insurance, and benefits, monopolistic ridesharing companies are able to leverage their resources and market power for diversification, which creates synergies, and greater social impact.

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Gad Allon
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2020-01-01
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