Supply–Demand Service Equilibria in Ride-Sourcing Systems: Modeling and Simulation of Driver-Supply Regulations

Abstract

Ride-sourcing markets depend on the interaction between drivers’ decisions to provide active service and passengers’ travel-mode choices. This study develops a supply–demand equilibrium framework that integrates drivers’ net earnings, passenger generalized costs, and a sequential adjustment mechanism to examine how driver-supply regulations reshape market outcomes. The framework distinguishes the registered driver pool from active service supply and characterizes interior and constrained market equilibria. Numerical simulations show that a one-unit bonus per selected ride-sourcing demand unit increases active driver supply by 11.34% and selected ride-sourcing demand by 1.31% while reducing the waiting-cost index by 9.01% under the benchmark demand setting. In contrast, supply restrictions and additional participation costs reduce active supply and increase the waiting-cost index. A comparison matched to the same 20% supply reduction reveals a clear distributional distinction: quantitative caps preserve scarcity rents for active drivers, whereas equivalent participation costs and levies reduce these rents through different cost-incidence and transfer mechanisms. Sensitivity analyses further demonstrate the importance of outside earnings, waiting-cost responsiveness, and platform payment arrangements in shaping equilibrium outcomes. The study provides a systematic basis for understanding driver participation, service adjustment, and the distributional consequences of alternative ride-sourcing regulations.