Mobility-on-Demand platforms are a fast growing component of the urban transit ecosystem. Though a growing literature addresses the question of how to make individual MoD platforms more efficient, much less is known about the cost of market fragmentation, i.e., the impact on overall welfare due to splitting demand between multiple independent platforms. Our work aims to quantify how much platform fragmentation degrades the efficiency of the system. In particular, we focus on a setting where demand is exogenously split between multiple platforms, and study the increase in supply rebalancing costs incurred by each platform to meet this demand, vis-à-vis the cost incurred by a centralized platform serving the aggregate demand. We show under a large-market scaling, this Price-of-Fragmentation undergoes a phase transition, wherein, depending on the nature of the exogenous demand, the additional cost due to fragmentation either vanishes or grows unbounded. We provide conditions that characterize which regime applies to any given system, and discuss implications of these findings on how such platforms should be regulated.

Thibault Séjournè

Samitha Samaranayake

Siddhartha Banerjee

Proceedings of the ACM on Measurement and Analysis of Computing Systems

The Price of Fragmentation in Mobility-on-Demand Services

This work aims to quantify how much platform fragmentation degrades the efficiency of the system, and shows under a large-market scaling, this Price-of-Fragmentation undergoes a phase transition, wherein, depending on the nature of the exogenous demand, the additional cost either vanishes or grows unbounded.

The Price of Fragmentation in Mobility-on-Demand Services

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Journal Info

Category	Quartile
COMPUTER SCIENCE, INFORMATION SYSTEMS	3