Game-theoretic modeling reveals that ride-hailing and vehicle age limits increase new car sales and environmental burdens, highlighting unintended trade-offs across automotive markets.
Key Points
To evaluate how ride-hailing services and platform-enforced vehicle age limits influence original equipment manufacturer car sales, secondary markets, and net environmental outcomes.
Formulated a game-theoretic model capturing durable goods dynamics and interactions among car manufacturers, retail consumers, ride-hailing platforms, and secondary used car markets.
Endogenized driver vehicle replacement choices and secondary market supply shifts under platform-mandated vehicle age caps.
Ride-hailing expands total new car sales and increases consumer ownership of new vehicles because it competes primarily against lower-cost used car markets rather than new vehicle purchases.
Vehicle age limits stimulate driver replacement frequency, boosting manufacturer sales and profits while generating a larger supply of used cars in secondary markets.
Ride-hailing and fleet turnover can paradoxically worsen net environmental impacts despite the theoretical operational efficiencies gained from passenger trip pooling.