Impact of Privacy Regulation Involving Information Collection on the Ride-Hailing Market

Since the privacy information collected by platforms brings some negative effects governments enact privacy regulations to protect customer privacy. Inspired by this observation we aim to investigate the impact of privacy regulations on different stakeholders in the ride-hailing market including customers drivers platforms and regulators. Specifically we formulate two multi-stage Stackelberg models under the scenarios with/without privacy regulation respectively compare the equilibrium results under these two scenarios and obtain several interesting findings. First the partial-coverage pricing strategy is more likely to be adopted by platforms than the full-coverage pricing strategy as privacy regulations are enforced. Second when customers are not too severely disturbed by advertising the privacy regulation transfers information decision-making right from the ride-hailing platform to customers and utilizes customers' self-interest to alleviate the negative impact of information collected by the platform; Otherwise it seems somewhat redundant. Third the decision-making about privacy regulation results from a trade-off between economic benefits and information security.