Question

In the absence of app-based services, what roles do coordination failures play in causing failure in unregulated ride hailing services? How can ride-hailing apps mitigate such contracting problems?

Answer 1

In the given scenario, coordination failure leads to increase in lead time of the service delivery and people lack trust upon these services. As a result, it makes ride hailing services to fail. Further, another role is to make higher cost of services due to lack of coordination, leading to lack of competition. It hurts consumers and lt causes failure of these services.

When there are ride hailing apps, then price is decided on a real time basis, depending upon the time, number of service providers and the area of demand among the others. It brings transparency. Further, it facilitates coordination with the service providers with ease and customers can direct interact with them. It develops trust and service delivery also becomes fast. So, problems are mitigated when ride hailing apps are used.