Equilibrium of the ride-sourcing market considering labor supply

Mobile technology has led to more and more app-based ride-sourcing platforms on the market. This paper analyzes the pricing strategies of ride-sourcing platforms by economic model and numerical experiment. We propose an overall model which includes demand, labor supply, and the matching function between demand and supply. The model explicitly considers the interaction between labor supply and driver income, while modeling the market as a system of nonlinear equations. We prove the existence of market equilibrium through the fixed point theorem, and propose an approximate iterative algorithm to obtain the equilibrium. Finally, we use numerical experiments to study the impact of pricing strategies on the ride-sourcing market.