Question

why is ridesharing not a dominant firm industry? Explain by referring to concepts such as multi-homing costs, network effects and product differentiation.

Answer 1

Here I am going to describe about why is right sharing not a dominant form industry also by explaining the concepts such as multi homing cost, network effects and product differentiation.

it is definitely true to say that the ride sharing industry is not a dominate form industry as many other forms are likely to enter this industry of market very easily. there are many companies that have entered the ride sharing from industry and they are the rival competitors of each other in this industry. Let's take a great example of Uber and lyft. they are the great rival of each other when it comes to the right sharing form industry. But none of them is the dominant one as people tend to use both of them probably equal to each other.

now I am going to describe about what is multi homing cost, network effects and product differentiation in the ride sharing form industry.

MULTI HOMING COST :- multi homing cost can be described as the cost when that riders are more there likely to be e more incline towards the customers this also increases the wait time and hence it happens to be the multi homing cost.

NETWORK EFFECTS :- it is definitely true to say that, when the product of the surface become more valuable the more people are likely to use those product of the services this is the effect of network.

PRODUCT DIFFERENTIATION :-it is not supposed to say that when the product is differentiated from the other product or when the product or the service is unique in its own it tends to have more profit then the other competitors.