Ride-Hailing Industry – A Case for the Profit Split Model

The ride-hailing industry has disrupted the traditional taxi business and achieved astronomical growth in the last decade. However, 2020 was an exceptional year where demand plummeted due to the COVID-19 pandemic. But the industry is expected to swiftly revive. Although the ride-hailing business is a type of platform business model, it is significantly a local industry by nature. In this article, the author analyses the ride-hailing industry, emerging trends in this industry and key value-creating activities/value drivers of the business. This analysis is followed by guidance on a plausible transfer pricing model that aligns with value-creating activities.