Navigating the Complexity of Market Power Analysis in Ride-Hailing Mergers
Keywords:
Ride-hailing Marke, Market Power, Indirect Network Effects, Mergers & Acquisitions, Competition PolicyAbstract
The prevailing M&As in ride-hailing industry presents new regulatory challenges for antitrust authorities, revealing inadequacies of existing merger control frameworks. This paper navigates the complexity of market power analysis in ride-hailing mergers. The study examines 2x regional merger deals (Uber-Careem and Uber-Grab) involving several countries to identify the extent to which the conventional tools and techniques are being used by the competition agencies. To access the limitations of traditional methodologies, it delves deeper into the characteristics of the ride-hailing platforms like two-sided structure, indirect network effects, matchmaking, pricing dynamics and multi-homing etc, which complicates the process of market power analysis. To demonstrate the complexity of two-sided markets, a theoretical model has been formulated in this study which offers a basic pathway to understand the misapplication of existing merger control policies. This study concludes that conventional procedures and techniques designed for static one-sided markets cannot capture the true intricacies of ride-hailing market and potentially leads to misinterpretations. Finally, this article put forward recommendations for perfecting competition law and policy frameworks in digital markets.
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