The Optimal Monthly Strategy Pricing of Free-Floating Bike Sharing Platform - Modern Economy

ME > Vol.9 No.2, February 2018

The Optimal Monthly Strategy Pricing of Free-Floating Bike Sharing Platform ()

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Download as PDF (Size: 1965KB) PP. 318-338

DOI: 10.4236/me.2018.92021 1,172 Downloads 3,207 Views Citations

Author(s)

Xi Cheng^*, Yang Gao

Affiliation(s)

School of Business Administration, South China University of Technology, Guangzhou, China.

ABSTRACT

This paper studies the revenue changes of the platform after the free-floating bike sharing platform adopts the monthly strategy, and obtains the best monthly subscription pricing to maximize the platform revenue. Through the comparison of user utility, we divide different types of users, depict the platform requirements, and thus find the platform revenue. We found that when the platform adopts the monthly strategy, if the monthly subscription price is too low, platform’s revenue will be reduced. If the price is too high, the revenue will not change. Only in the case of a suitable monthly subscription price, platform revenue will increase. In addition, we find that the growth rate of platform revenue with the optimal pricing of monthly strategy is related to the purchase cost of bike. The lower the purchase cost, the higher the platform revenue growth rate.

KEYWORDS

Sharing Economy, Free-Floating, Bike Sharing Platform, Pricing

Share and Cite:

Cheng, X. and Gao, Y. (2018) The Optimal Monthly Strategy Pricing of Free-Floating Bike Sharing Platform. Modern Economy, 9, 318-338. doi: 10.4236/me.2018.92021.

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