Market Entry of Ride - Hailing: Leveraging Restrictive Regulation and Incentive Regulation

Lihua Wu

Abstract: Focusing on the market entry system for ride-hailing service, the paper explores two kinds of regulation patterns, namely restrictive regulation and incentive regulation. Taking the ride-hailing market of Beijing city as an empirical case, the paper analyzes the selection strategy of market entry regulation for ride-hailing. The research shows that the restrictive regulation in the form of administrative licensing restrains the ride-hailing drivers and vehicles into the market, which may lead to insufficient supply of transport capacity. Comparatively, the incentive regulation in the form of business registration increases the pressure of in-process supervision due to the low market entry thresholds. Therefore, the re-assessment should be conducted in time during the initiative proposal of regulation and after the implementation of regulation. Regulation rules and measures should be adjusted dynamically according to the re-assessment effect and the ?appropriate regulation? is suggested t to the ride-hailing market for the adaptive and moderate regulation.

Keywords: Ride-hailing market, market entry, restrictive regulation, incentive regulation, appropriate regulation