Understanding the ridehailing market

This paper reviews the evolution of ridehailing markets and synthesizes the growing academic literature that studies their operational, economic and regulatory foundations. Motivated by the rapid displacement of traditional taxis by transportation network companies such as Uber and Lyft, this paper situates modern ridehailing within its historical and regulatory context and highlights how digital platforms have reshaped labor supply, matching, pricing and service design. The review organizes prior work around core operational levers – driver supply management, matching technologies and service differentiation – and examines how these levers jointly determine passenger wait times, prices, driver utilization and platform performance. This paper then turns to market-level outcomes, including competition between platforms, driver multi-homing, congestion and welfare implications for drivers and passengers, emphasizing how congestion and spatial frictions distinguish ridehailing from canonical two-sided markets. Regulatory responses, including wage floors, worker classification and caps on driver entry, are discussed alongside their operational trade-offs. Finally, this paper considers emerging challenges and opportunities, including the persistence of traditional taxis and the integration of autonomous vehicles. By synthesizing insights across operations management, economics and transportation research, this paper provides a structured framework for understanding ridehailing markets and identifies open questions for future research and policy design.