Government regulations for ride-sourcing services

In this chapter, we investigate the properties of the Pareto-efficient frontier, the two endpoints of which indicate the monopoly optimum and the social optimum, respectively. To facilitate our analyses and avoid redundancy, we approximate the matching frictions using the deductive matching model based on the first-come-first-served matching scheme; the models using other approximation methods can be analysed in a similar manner. We also discuss the various regulations that may be imposed by a government to induce a ride-sourcing platform to choose a Pareto-efficient strategy that effectively balances the trade-off between the platform profit and social welfare. Moreover, we discuss a variety of government regulations, namely, price regulation, wage regulation, commission cap regulation and fleet size control.