Issues of ride-hailing applications

The ride-hailing applications is a kind of sharing economy. With few decades of development, the sharing economy is becoming different from its original intention of birth, the exist of sharing economy replaces the ownership of goods with temporary right of use, which attracts a lot of consumers. The consumers can rent or borrow a commodity for a short time, with a small cost, and this provided consumers with a lot of convenience, they can use certain goods in certain time, rather than spending a lot of money to buy it (Puschmann, 2016). The private car owners use their free time to carry passengers to act as taxis though online platforms this allows them to earn extra income in their part time, and passengers can use private cars which is better than taxis with an affordable price. On the other hand, at the beginning, using sharing economy platforms could built a sense of trust between strangers, some users even made new friend by this, however, with the development of these this sense of trust disappeared gradually. At the same time, take DIDI as an example, drivers initially take this as a part time job, however, because of the benefits promised by platforms, they switch part time job into full time job. But this kind of promise might only exist in the early days of competition of platforms, which means in their effort to be monopolist, once the platform almost monopolized the market, the deteriorating labour conditions, price war, and income inequality all make the income of labours will squeeze (Schor, 2017). Meanwhile, the security concerns about ride-hailing applications exist. The trend of monopoly of some platforms makes it almost impossible for new companies to enter the market, and this leads the reform of platforms become more difficult.

Uber ride-hailing passenger, Toronto” by BeyondDC is licensed under CC BY-NC-ND 2.0.

The treatment of drivers

Making a lot of money with spare time is a dream invented by ride-hailing applications for drivers.

At the beginning, flexible working hours and high wages attracted may drivers to join the platforms, some of them use their own cars to take passengers, and some of them even bought a car for this to earn more money. However, during the development of platform,  Large number of ridesharing driver accounts have been deactivated, which is non-transparent and difficult to appeal, at the same time, some of this are suspected of racial discrimination. Meanwhile, the platforms take an increasingly large percentage of the fare, and the maintenance of cars, the cost of gas and insurance should be paid by drivers themselves.  Research shows that because of the lack of communicate of drivers, it is hard for them of know income of each other, and the ride-hailing platforms take the advantage of this, the inequality of income appears and affect the drivers (Bokányi, 2020). On the other hand, whether the driver have dependence on platforms also affect if they will satisfy the income from ridesharing. It is interesting that the full-time drivers which means people who have high dependence on platforms have less satisfied and earn less (Schor, 2020). And this brings great uncertainty and great risk to those who work in ridesharing on platforms with their full time. It is true that the ride-hailing applications give normal people chance to increase their income, it provides drivers more freedom than taxi. For those using their part time to share, their car this does give them subsidies. However, when ridesharing become the only thing they depend on, companies should focus on the income stability and equity, which does not seem to be the case now. if this industry is still promising and worth to enter need to be considered.

Security issues

The safety of drivers and passengers is threatened in ride-hailing.

DIDI, a Chinese ride-hailing application giant, which almost a monopolist of Chinese ridesharing market. however, in these years, there were many reports of the safety of passengers even their lives being threatened. One of the most famous cases was the murder of two female passengers in only three months. These two victims aged only 20 and 21, were brutally killed, which made many Chinese people feel sorry and angry for what they suffered, at the same time, many Chinese people questioned the huge operational loopholes. The friend of one of the victims said that she had called the customer service number repeatedly, however there was no one answered. Meanwhile, Chinese police said that when they try to contact DIDI, the DIDI replied that this request would take serval hours. DIDI is not the first company to be questioned for security issues, in fact, research shows that ride-hailing applications are inherently likely to have security issues, people expressed the concerns about the safety of ride-hailing applications, they worry about if the drivers are qualified, on the other hand, they believe it is difficult to regulate ride-hailing application. Although these platforms tried to update security systems to protect the safety of users, they do not able to grantee these events will not happen again (Acheampong, 2021). As a result, the safety of drivers and passengers is a challenge that ride-hailing platforms should face.

The market of online ride-hailing has a trend of monopoly. The decrease in the income of drivers, the rising fares, and even the safety issues are closely related to the monopoly trend of platforms. Take DIDI as an example again, in China, the DIDI shares almost 90 percent of market, the price war is the common way for the competition of market. And this leads many drivers were attracted by the subsidy, the passengers were attracted by low cost. However, once the DIDI grabbed a big share of Chinese market, the issues which were discussed in this essay appears. It is true that endless subsidy and low price is difficult for any companies, but once the market controlled by one company, there will be a large number of companies exit the market, this leads Winner-takes-all (Smichowski, 2018). When the market share for a company is large enough, the company will almost control the service level of industry, and their incentive to innovate will reduce greatly. The innovation of platforms, the execution, and if the security system is reliable, due to the lack of competitors, the platforms with high market share are almost the ruler of the market or even represent the highest level of industry. If the platforms response the security issues negatively, the progress of sharing economy will be hindered.

In conclusion, the sharing economy was originally an idea of mutual trust. However, with the development of ride-hailing, many negative feedbacks are given by drivers and passengers, for drivers, their income and benefits reduced, and a series of inequality still affect the drivers, it is true that the platforms attract the market by price war, reducing cost and increase prices to recover the loss is understandable, but for those who want to buy a car and join this industry to work as a driver, is still a question worth pondering. For security issues, although platforms make many efforts, these kinds of cases still hard to be eliminated completely. the advantage of sharing economy is also the shortage of it, which is the flexible work, the flexible labour, these leads regulation become complex and challenging. As for the trend of monopoly, it might be the reason of the reduce of income of ridesharing drivers, higher price and safety issues, the trend of monopoly could not be avoided, but platforms may find a better way to recover the loss and safeguard the rights and interests of their users.  

Reference list

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Schor, J. B., Attwood-Charles, W., Cansoy, M., Ladegaard, I., & Wengronowitz, R. (2020). Dependence and precarity in the platform economy. Theory and Society, 49(5–6), 833–861.

Wee, S. (2018, August 26). Didi suspends carpooling service in China after 2nd passenger is killed. The New York Times.