Sustaining Multi-Sided Platforms While Creating Value: The Ride-Hailing Experience

Abstract

Multi-sided platforms (MSPs) can enable multiple user groups to create coordinated value. Like all transformative business models, these platforms emerged to resolve platform-related issues. Among the well-known MSPs, this research has focused on the ride-hailing platform InDrive as a successful case of MSP in Pakistan. Despite the presence of major companies like Uber and Careem, InDrive has gained recognition in a short period and has become the most downloaded ride-hailing application in Pakistan. InDrive focuses on empowering riders and drivers with greater fare-setting autonomy through negotiation; this peer-to-peer pricing model distinguishes it from its counterparts (Uber and Careem). This research examines the strategic features and innovations of InDrive’s business model to create a comprehensive framework for evaluating the effectiveness of strategic management, focusing on generating value by balancing the well-being of all stakeholders, ensuring equity, boosting productivity, and enhancing the impact of network effects. Notably, ride-hailing services (RHSs) are highly dynamic, as the features and offerings of these platforms may evolve. Therefore, balancing the sustainability of MSPs requires ongoing effort and an iterative approach.

1. Introduction

Platform businesses continue to shape economies and industries worldwide due to their transformative nature. These businesses operate as intermediaries that connect different user groups to create value through interactions, transactions, and exchanges between two or more distinct user segments, also known as multi-sided platforms (MSPs) [1,2]. These platforms play a crucial intermediation or matchmaking role in the digital economy by connecting users, driving value through network effects, and reshaping traditional business models [3,4]. MSPs’ success often depends on balancing the needs and interests of different user segments while capitalizing on the positive feedback loops created by network effects [4]. If more users are connected to the platform, that platform will be considered more valuable [5].

While providing numerous benefits, MSPs also face several challenges and issues related to implementation [6]. These issues create significant hurdles to society’s development and well-being. To attain a sustainable platform, balancing is an important concept in the business world requiring more research.

The existing literature on multi-sided platforms (MSPs) primarily examines platforms operating in mature markets and high-income economies, where stable regulatory frameworks, strong consumer purchasing power, and well-developed infrastructure create favorable conditions for platform sustainability [1,5,7,8]. Consequently, theoretical discussions on MSP sustainability are largely situated within these contexts, often overlooking the distinct challenges faced in emerging markets, such as infrastructural deficits, regulatory uncertainty, and heterogeneous consumer behaviors [9,10]. This gap underscores the need for a broader analytical framework that accounts for the structural and institutional complexities shaping MSP viability in diverse economic landscapes.

To fill the gap, this study specifies research areas like the mobility economy and multi-sided platforms while emphasizing value creation. This research has considered the ride-hailing platform a successful example of an MSP from the mobility economy with the purpose of deriving new insights into platform expansion. Initially, developed countries took the initiative of RHS. It is difficult to transfer ride-hailing services from developed to developing countries, as such a service is context-dependent; therefore, service reshaping is required to penetrate emerging and local markets [11]. This research focuses on how ride-hailing platforms create and sustain value, referencing business model innovation [12] and digital platform strategies.

The emerging economy selected for this research is Pakistan (a developing country), because ride-hailing services have been acknowledged as a significant consideration in Pakistan. These have become an increasingly popular mode of transportation in which riders pay for the serviced ride through an application installed on their smartphones. It is a convenient and low-cost facility, serving millions of users per day with a motivation to protect the environment. There are three prominent RHS platforms in Pakistan: Uber (launched in 2016), Careem (launched in 2016), and InDrive (launched in 2021). These MSPs share a similar business model of connecting riders with drivers through a mobile app; yet there are remarkable differences in how they operate and cater to the Pakistani market.

Uber, as a pioneer in the industry, has a wide-reaching presence but faces more substantial regulatory challenges. It has emphasized competitive pricing and superior user experience with no control given to the drivers. Careem emphasizes localized solutions, cultural sensitivity, and has established strong partnerships with regional stakeholders. It requires more transaction costs to achieve a balance. InDrive, on the other hand, a relatively newer entrant, focuses on empowering drivers with greater fare-setting autonomy, which distinguishes it from its counterparts. Recently, InDrive has become the most downloaded app in Pakistan, as shown in

Table 1. Prominent features of ride-hailing services (RHSs) in Pakistan. (Sources: Adapted from [11,13]; official websites; Uber [14], Careem [15], InDrive [16].)

RHSs in Pakistan	Uber (2016)	Careem (2016)	InDrive (2021)
Operational approach	Standardized global approach	Localized solutions	Fare-setting autonomy
Travel pricing	- Dynamic pricing model - Surge pricing during peak hours	Hybrid pricing model (distance and time calculation)	- Peer-to-peer pricing model - Fixed per trip - Lower prices
Driver incentives	- 75% of the trip value - Bonuses	- 80% of the trip value - Bonuses, incentives, and performance-based rewards - Professional training - Premium driver ranking	- First 6 months 100% trip value - After 6 months 90–95%of the trip value—Bonuses - Professional training
Penalty	Penalty applies when rejecting rides	Penalty applies after rejecting 3 consecutive rides	Zero penalty (driver can skip as many ride requests as he likes)
Ride control	- No driver selection option - Slogan: Let the app lead the way	- Female driver availability option - Flexible earning ways - Slogan: Be your own boss; make your own money	- Driver selection option with adjustable fare - Choose a request by fare, route, and driver/passenger rating - Slogan: People driven
Working conditions	Algorithm based part-time	- Full-time - Part-time - Target-oriented/per-ride system	- Full-time - Flexible part-time working hours
Payment system	Cashless payments through credit/debit cards	Cashless payments through credit/debit cards, and Careem wallet	Cash-based payment system

.

Table 1 indicates that InDrive’s business model is particularly relevant to emerging economies such as Pakistan, where structural challenges—including income inequality, economic instability, and the occurrence of informal employment—create significant barriers for both passengers and drivers [17]. By leveraging a decentralized approach that empowers local users through flexible pricing mechanisms and lower commission structures, InDrive offers an alternative framework for MSP sustainability in resource-constrained settings. This case study highlights how the InDrive platform model can serve as a tool for economic inclusion and social empowerment, distinguishing itself by prioritizing user agency and affordability over extractive pricing strategies [18].

InDrive’s negotiated pricing system and decentralized governance model allow it to more easily navigate diverse economic landscapes. It empowers local drivers and passengers to set prices and customize their services. InDrive creates a platform model that can quickly adapt to new and varied regulatory environments, which is especially critical in emerging markets where regulations can be inconsistent or change rapidly.

Therefore, selecting InDrive as a case study plays an important role in analyzing the detailed processes and actions taken to address key issues related to achieving balance in the sustainability of MSPs by considering the following research questions:

• How does InDrive effectively balance the interests of diverse stakeholders within the platform ecosystem?
• What is the value creation mechanism of InDrive to resolve platform-related issues?

This paper proposes that value creation in an MSP occurs through carefully balancing user groups, fostering network effects, providing value-added services, and implementing effective governance and control mechanisms. By successfully aligning the needs and interests of representatives from multiple sides and implementing innovative strategies to resolve platform-related issues, the InDrive platform creates an ecosystem where users can interact, transact, and originate values through their participation.

Research Significance and Originality

There are many studies about multi-sided platforms that are merely snapshot surveys, but studies related to balancing sustainability parameters are limited. This selected case of InDrive is among the first studies of its kind to address the genuine progression of familiarizing the trend of individual well-being implementation. The case provides valuable insights for policymakers, business specialists, and academics seeking to understand the complexities of MSPs in emerging markets like Pakistan. This research also offers guidance of practical significance for MSP operators to further optimize their schemes and ensure sustained value creation for all involved stakeholders. This research will reveal how the platform business evolves through such competition in general.

This paper is organized into five sections: the theoretical background extracted from the literature is explained in Section 2. The research methodology adopted in this paper is explained in the third section. Section 4 is about the demonstration of research findings, together with a discussion. The last section concludes the research findings and their contributions to the literature and to practice. Future research directions are also considered in this section.

2. Theoretical Background

Multiple studies have been conducted on multi-sided platforms from different perspectives, including model formation, strategy, and technological management [19]. However, three main domains have attracted the attention of the readers: ride-hailing as a multi-sided platform; issues related to multi-sided platforms; and sustainable development with sustainable development goals (SDGs) are discussed in Section 2.1, Section 2.2 and Section 2.3.

2.1. Ride-Hailing as a Multi-Sided Platform

Ride-hailing platforms are considered the leading example of multi-sided platforms (MSPs) that create value by facilitating interactions between three primary user groups: riders, drivers, and platform operators. By serving as intermediaries, these platforms enable riders to request a ride, drivers to offer ride services, and platform operators to monetize and facilitate interactions. The value of MSPs increases when more and more users connect with the platform, leading to creating a positive feedback loop, i.e., more riders attract more drivers [20].

Most ride-hailing platforms practice a dynamic pricing model that varies with the change in demand and supply; for example, surge prices paid by riders during peak hours incentivize more drivers to join the platform [21]. The most crucial tasks of ride-hailing platforms are to build trust between platform users and reduce information irregularity. Because of their multi-sided nature, these platforms face regulatory challenges, and regulators are key partners in balancing group interests, such as passenger safety and the labor rights of drivers, with fair competition.

Moreover, these platforms collect user data available on the app to improve their services, decision-making, and pricing through algorithms [22]. These perform an important role in economic development by integrating additional services like food delivery, electric bikes, and freight services for further expanding their value propositions [23].

Recent research on multi-sided platforms (MSPs), particularly in the context of ride-hailing services, has explored various aspects of platform dynamics, competition, and sustainability, as shown in

Table 2. Aspects of multi-sided platforms in the context of ride-hailing services (source: adapted from [24,25,26]).

Aspects	Descriptions	Sources
Competition and Market Dynamics	If new companies offer big discounts or financial support, they can stay competitive, leading to a situation where multiple companies share the market instead of one taking it all.	[24]
Platform Business Model Selection	Drivers are more likely to prefer self-operated platforms when they meet compliance qualifications, thereby creating barriers to entry into the industry.	[25]
Performance Management	The emerging scenario analysis shows that adjustments in commission rates for drivers and price reductions for riders by competitors have a significant impact on the ride-hailing industry.	[26]

.

2.2. Issues Related to Multi-Sided Platforms

Multi-sided platforms, while offering numerous advantages, also face several challenges and problems that are intrinsic to their multifaceted business models, and there is a need to balance the interests of multiple user groups. These challenges can impact their growth, sustainability, and ability to create value for all the connected users. The major issues and challenges faced by MSPs that cause imbalances of platforms include matchmaking problems (imbalanced demand and supply), chicken-and-egg problems, network effects, regulatory challenges, multi-homing, etc.

One of the major issues related to MSPs is to retain stability between the demand and supply of the multiple user groups. The challenge is to manage them effectively to avoid negative effects and experiences [5]. The other problem is a chicken-and-egg problem that arises when the value of the one side’s user group is dependent on the other side’s user group and it becomes challenging if there are fewer users on one side than the other side. This imbalance introduces problems into the calculation of the functions and effectivity of MSPs [6]. Similarly, it is not easy to ensure effective user matching on a platform. Poor matching leads to low user engagement and value destruction [27]. MSPs handle sensitive user information, so it is a significant challenge to safeguard private data and maintain user trust. To ensure data privacy, the involvement of legal authorities and regulatory bodies can also be challenging [1].

Moreover, the development of an effective monetization policy to generate maximum revenue while keeping a strong focus on user engagement and retention is challenging, especially in this era when the service platform competition is very high. This lock-in can reduce mobility and lead to diminishing the capability of the platform’s innovation [2]. To retrieve maximum benefits from MSPs and to develop a sustainable platform, it is necessary to resolve platform-related issues.

2.3. Sustainable Development and Sustainable Development Goals (SDGs)

The Sustainable Development Goals (SDGs) are a collection of 17 global objectives introduced by the United Nations in 2015, designed to tackle the world’s most crucial challenges. These goals cover a wide range of issues, including poverty, inequality, health, education, climate action, clean water, and economic growth, all aimed at fostering a more sustainable and equitable world. Each goal is accompanied by specific targets that encourage collaboration among countries, organizations, and individuals to achieve these objectives. These goals are designed to balance the three dimensions of sustainable development: environmental sustainability, social inclusion, and economic growth [28].

The SDGs are grounded in the principles of universal application, meaning they apply to all countries, regardless of their level of development. They seek to foster global partnerships for sustainable development, aiming to leave no one behind. Governments, businesses, and civil society are all expected to play key roles in implementing the SDGs by aligning policies, actions, and strategies with these global objectives. The SDGs emphasize a holistic approach to address the interconnected challenges of today’s world, acknowledging that advancements in one area are often dependent upon progress in others [29,30].

3. Research Methods

The knowledge developed in this research follows two research philosophies: the ontological orientation of constructionism, whereby social phenomena and associated categories are considered to be in a constant state of revision to construct different perceptions, and the epistemological orientation of interpretivism, whereby individuals shape society and develop truth based on social interactions. This study adopted a qualitative research strategy with a triangulation approach. Triangulation is a fundamental validation technique in qualitative research that enhances the credibility, reliability, and objectivity of findings. By integrating multiple data sources, such as interview responses and secondary data, researchers can validate insights, mitigate potential biases, and ensure a more comprehensive analysis of the phenomenon under investigation. This methodological approach strengthens the internal validity of the study and provides a holistic perspective on the research topic [31,32]. To answer “what and how” questions [33], the case study technique was selected as a research method.

To gain in-depth insights into the operational dynamics, challenges, and strategic adaptations of multi-sided platforms (MSPs) in Pakistan’s ride-hailing sector, semi-structured interviews were conducted. The first target was to design a case study semi-structured interview protocol. The interview data were collected with the managers, employees, drivers, and riders of Uber, Careem, and InDrive platforms to extract findings to elaborate the balancing sustainability of MSPs, as shown in

Table 3. Detailed research approach for data collection in Pakistan (source: author).

Triangulation Approach	Data Collection Methods	Target Research Areas
Management side	Website data/Interviews (Uber 2, Careem 2, InDrive 4)	Unique characteristics and customization strategies for achieving a sustainable platform
Driver side	Interviews (Uber 2, Careem 2, InDrive 2)	Work opportunities, well-being, and protection rights
Rider side	Interviews (Uber 2, Careem 2, InDrive 2)	Rider satisfaction, well-being, and community involvement

.

A total of 20 interviews were conducted: 18 interviews in the first round to make a clear comparison of platforms (Uber, Careem, InDrive) and 2 interviews in the second round to further investigate InDrive’s operational mechanism (

Table 4. Interview samples (source: author).

Triangulation Approach	RHSs	Number of Interviews	Gender	Designation of Interviewees	Employment Duration	Interview Duration (Minutes)
Management side	Uber	1 1	Male Male	Operation manager Public relation officer	2 Years 2 Years	40 60
	Careem	1 1	Male Male	Operation manager Marketing associate	4 Years 2 Years	50 60
	InDrive (Round 1)	1 1	Male Male	Operation manager Communication manager	3 Years 1 Year	60 45
	InDrive (Round 2)	1 1	Male Female	City supply associate Public relation officer	2 Year 1 Year	50 60
Driver side	Uber	1 1	Male Male	Part-time Part-time	1 Year 5 Months	30 35
	Careem	1 1	Male Female	Full-time Part-time	1 Year 6 Months	40 30
	InDrive	1 1	Male Female	Full-time Part-time	2 Years 8 Months	40 30
Rider side	Uber	1 1	Male Female	Occasional user Occasional user	Situational based	30 35
	Careem	1 1	Male Female	Frequently user Frequently user	Price consistency	30 30
	InDrive	1 1	Male Female	Regular user Budget-conscious user	Promotional discounts, shared rides	30 35

). Moreover, the basic and latest updates were collected through a literature review and from the official websites of ride-hailing platforms (Uber, Careem, InDrive) to analyze market trends and growth.

The first round of interviews was carried out from March to April 2024, and the second in July 2024. Each session lasted between 30 and 60 min, depending on the participant’s availability and the depth of the discussion. Participants were selected using a purposive sampling approach to ensure representation across various user demographics, employment statuses, and levels of platform engagement. All interviews were audio-recorded, with participant consent, for accurate transcription and thematic analysis.

A major limitation of the interview method was the scheduling and coordination with participants through email and phone calls. Due to their hectic schedules, some interviews were cancelled or rescheduled at short notice, which occasionally affected the consistency of data collection and required logistical adjustments.

Later, for interview analysis, an inductive and iterative approach was adopted [34]. After transcribing all the interviews from the native language (Urdu) to English, this study employed thematic analysis to identify key themes associated with the examined phenomena [35]. The interpretative process in thematic analysis involved the application of codes to represent themes, which were subsequently linked to the data for comprehensive analysis [36]. Data were processed using systematic coding of key phrases and the extraction of significant concepts derived from interviewee statements. This iterative process facilitated continuous engagement with the data, enabling a dynamic interaction between empirical findings and the emerging theoretical framework [37]. Findings were structured narratively, prioritizing them according to their significance.

The dataset comprised primary interviews, relevant documents, and articles. In accordance with Strauss and Corbin’s (1998) [38] first-order coding approach, initial concepts were categorized and integrated into major thematic categories to derive theoretical dimensions. To develop the second construct from first-order coding, all open codes were analyzed to establish second-order themes, thereby informing the development of multi-sided platforms. Creative coding techniques were employed, leading to the construction of a code map and the formulation of a theoretical linkage to explain the progressive association of MSPs with the Sustainable Development Goals (SDGs). The structured interview protocol and the sequence of questions were instrumental in deriving meaningful insights from the study [39]. Given the semi-structured nature of the interviews, the resulting data were diverse, necessitating an interpretive approach to synthesize the responses into coherent findings, which are explained in the following section.

4. Results and Discussion

The results extracted from interviews show that value creation in an MSP occurs through carefully balancing user groups, fostering network effects, providing value-added services, and implementing effective governance and control mechanisms.

Based on the interviews, two main research findings are considered in this paper:

• First, to answer research question 1—How does InDrive effectively balance the interests of diverse stakeholders within the platform ecosystem?

  ○

  Successful classification of multi-sided platforms in terms of business model progression to attain sustainability.

• Second, to answer research question 2—What is the value creation mechanism of InDrive to resolve platform-related issues?

  ○

  Value creation through balancing parameters to resolve the multi-sided platform’s related issues.

4.1. Multi-Sided Platform Classification and Business Model Progression

The literature identifies two basic types of platforms: transaction platforms [4], which focus on short-run benefits, and innovation platforms [10], which provide long-run benefits. The interview analysis reveals the emergence of a third type of platform that has recently gained success: it is referred to in this paper as a hybrid platform (Section 4.1.3). In the current era of the sharing economy, people are interested in availing both short-run and long-run benefits; therefore, hybrid platforms have emerged that are considered to be a blend of transaction and innovation platforms (Figure 1). The concept of a hybrid platform states that to balance sustainability in an MSP, it is necessary to maintain a stable situation and conditions among the exchange parties and the contents.

After comparing three ride-hailing services—Uber, Careem, and InDrive—it is noted that InDrive has been recognized as the fastest-growing ride-hailing platform in Pakistan’s sharing economy in 2022. In 2023, InDrive emerged as the most downloaded ride-hailing app in Pakistan, reaching 6.5 million downloads [16]. It has shown tremendous growth not only in ride-hailing but also in intercity transportation, freight and courier services, job listings, and more. As of April 2024, InDrive recorded over 2 million daily active users in Pakistan, surpassing Careem’s 380,000 and Uber’s 170,000 daily active users. Compared to other ride-hailing services, the average monthly income for an InDrive driver is close to the national average income [16]. Interviews reveal that by successfully aligning the needs and interests of multiple side representatives, the InDrive platform has created an ecosystem where users can interact, transact, and originate value from their participation. This achievement is recognized as a first step towards sustainability, as shown in Figure 1.

4.1.1. Transaction Platform

A transaction platform is generally a system or infrastructure that serves as a mediator between two groups of users to exchange goods, services, or information. The parties involved in a transaction obtain value through mutual interactions. This platform enables the secure completion of transactions by generating, sharing, and consuming the value of the exchange content [4]. Transaction platforms are the typical and standardized platforms that can vary in scope, size, and complexity, depending on the audience, target industry, and purpose they aid [4].

This paper defines transaction platform as:

“A transaction platform is a digital marketplace that connects different users to exchange goods, services, or information. It acts as a middleman, using technology to match users, process transactions, and improve efficiency”.

Transaction platforms can exist in various forms, and Uber in Pakistan is a typical example [4]. Uber follows a traditional ride-hailing mechanism. It involves the rider, driver, and transaction platform in its business model.

“Globally, Uber has a standardized approach for providing consistent experiences across different markets […] Our focus is to provide reliable service by maintaining service quality”.

[Uber Manager 1]

Using the Uber platform, a rider books a ride, and the app automatically selects the driver, who is matched with the request, and fixes the price (algorithm-based) [13]. The driver works for Uber under fixed working conditions and receives 75% of the trip value as a service charge (Figure 1). The driver is responsible for maintaining Uber’s standards during the ride, and ultimately, the rider enjoys a timely and safe ride.

“Uber working is defined by a real-time matching algorithm that facilitates the connection between rider and the driver […] the payment system ensures the seamless fair transaction”.

[Uber Manager 2]

By taking the Uber example, the transaction platform can be described as a two-sided platform that resides at the initial boundary of the market that needs more expansion.

4.1.2. Innovation Platform

An innovation platform is referred to as a structured framework that creates an ecosystem to support the process of creating, refining, and implementing innovative thoughts, strategies, and solutions. To drive innovation and foster creativity, these platforms construct a collaborative space where multiple user groups come together to learn and share knowledge, resources, and expertise [10]. Innovation platforms aim to encourage and drive the collaboration of stakeholders to solve complex problems faced by the platform and suggest some innovative solutions [40]. Innovation platforms create a bridge between platform owners and ecosystem partners to develop new complementary products/services for adding value to the platform [10].

This paper defines an innovation platform as:

“An innovation platform focuses on fostering collaboration to create new services, products and technological advancement within an ecosystem that improve the overall platform experience”.

From the ride-hailing industry, the example of an innovative platform considered in this paper is Careem. It is a UAE-based company that was acquired by Uber in 2020. Following the acquisition, Careem is still working independently, but there are some mutual transactions between Uber and Careem. Initially, Careem followed the same business model as Uber when it was launched in Pakistan, but within a short period, it realized that some modifications and adaptations were necessary in order to ease penetration into the local market.

“We are establishing contacts with independent companies to facilitate and enhance ride service […] our focus is to expand passenger coverage by observing the local market needs”.

[Careem Manager 1]

The focus of Careem as an innovation platform is to involve multiple stakeholders in its business model to offer more localized products and services to the platform users [4].

“The target of Careem is to expand the circle of stakeholders. Careem is providing a platform for individual companies to come together and share the benefit”.

[Careem Manager 2]

Careem has tried to involve and accommodate all the levels of community (rich, middle class, and poor) in its service transactions. Careem has developed new strategies by forming collaborations to facilitate drivers who cannot afford cars and belong to the poor class of society [13]. Moreover, it has offered a greater portion of the service charges to the drivers than Uber, i.e., 80% of the trip value.

“I joined Careem as a full-time driver in January 2023, before I was driving for Uber […], Careem has provided me with a flexible working environment that’s the biggest difference from Uber […], Now I can earn enough to fulfill my family expenditures by working under convenient hours”.

[Careem Driver 1]

Careem has created a learning climate where people (riders, drivers, investors, and companies) along with Careem representatives come together and share their ideas and complexities and co-create innovative solutions. The focus of Careem is more on innovation than on individual transactions alone, as shown in Figure 1.

4.1.3. Hybrid Platform

A hybrid platform is a platform that combines the characteristics and functionalities of multiple types of platforms to create a unique blended business model that provides added value to the platform users. These platforms mainly emerged to address market gaps by utilizing the strengths and weaknesses of various platform types. The focus of these platforms is to offer more comprehensive solutions to cater to specific needs. Hybrid platforms allow users to engage in extensive transactions [41]. Hybrid MSPs unveil more innovative opportunities, as these platforms represent the blended forms of other MSPs. These platforms are established to capture market opportunities by differentiating themselves in a competitive landscape [42].

This paper defines a hybrid platform as:

“A hybrid platform refers to a platform that combines elements from different types of business models or services to enhance flexibility, reach, and user satisfaction”.

Based on the comparative interview analysis, it is observed that InDrive is working as a hybrid platform, as it has introduced a standard ride-hailing service similar to Uber but with innovative ideas derived from Careem. Basically, InDrive was established over the success of Careem by filling the gap between stakeholders where both parties obtain the benefits and reach a win-win situation. It emphasizes that by giving freedom to diverse stakeholders, platform costs can be minimized and user retention can be realized.

“The continued growth and expansion of InDrive in the global market is a piece of evidence of its commitment to maintaining and intensifying its foremost place in the ride-hailing industry for years to come”.

[InDrive Manager 1]

InDrive focuses more on the individual transaction between the rider and the driver. Launched in Pakistan during the pandemic, InDrive saw how people’s preferences changed due to economic crises. They prioritize low-fare ride services over quality assurance. InDrive identified the market gap and introduced fare negotiation anatomy to its business model. InDrive has targeted unhappy drivers and unhappy riders directly. And by creating a balance between rider affordability and driver income, InDrive has gained remarkable success among the ride-hailing platforms. InDrive offered more rights to the drivers to accept or reject the offered rides without penalties.

“InDrive allows riders to book a ride and have a direct price negotiation with the drivers of their own choice […], Both of the negotiating parties have equal rights to decide the ride fare […], they end up getting a better deal with low fare compared to other services”.

[InDrive Manager 2]

“When a driver enters into a contract with InDrive, first six months they receive 100% of the trip value, after six months still they are highly paid with 90 to 95% of the trip value and getting other benefits as well”.

[InDrive Manager 1]

Additionally, InDrive draws inspiration from the business model of Careem for service ecosystem expansion. InDrive has formed collaborations with third parties (courier and travel companies) to offer freight services to its platform users. Several global and local investors are connected with its platform to expand the service ecosystem of InDrive. They make investments against shared profits and, in return, InDrive successfully achieves deep market penetration by bringing in innovative transactions.

“In our success journey, our investors are our helping hands […], without investors and collaborative companies, I think it is difficult to survive in the market in the presence of giant competitors”.

[InDrive Manager 2]

Finally, it is observed that InDrive has achieved success in effectively balancing the interests of diverse stakeholders within the platform ecosystem by introducing the function of price negotiation, authorizing ride acceptance or rejection rights, and providing affordable rides.

“The advantage of choosing the InDrive service that immediately catches outsiders’ attention is the cash payment for a ride, in contrast to the card payment for Uber and Careem”.

[InDrive Manager 1]

Accessibility appears to be a considerable advantage for InDrive, as only 76% of consumers in Pakistan have credit cards. This limitation renders Uber and Careem inaccessible for about one-quarter of the population.

4.2. Balancing the Issues Faced by MSPs While Creating Value

Multi-sided platforms offer numerous advantages to their users but also face several problems and challenges that can hinder the way to success. Successful MSPs navigate these challenges and problems by embracing strategic styles, building strong relationships with user groups and stakeholders, fostering platform innovation, and being adaptable to fluctuating market conditions and economic policies. The analysis shows that InDrive is popular in creating value by effectively balancing the interests, needs, and concerns of multiple user groups, enabling positive interactions, and increasing platform usage through balancing individual well-being. Achieving this equilibrium state is essential for the sustainable growth and accomplishments of the platform.

“We have offered our users to enjoy a wider choice of travel destinations at their mutually acceptable low prices […], Our platform has made a positive impact on people’s lives”.

[InDrive Manager 1]

The balancing of three main problems (chicken-and-egg problem, matchmaking problem, and multi-homing problem) is considered in this paper to validate the balancing position of an MSP towards sustainability. The issues with viable strategies implemented by InDrive are discussed in the following sub-sections.

4.2.1. Balancing the “Chicken-And-Egg” Problem

• Issue

The chicken-and-egg problem refers to the difficulty of attracting and balancing two or more distinct user groups, often referred to as “sides” [5,43,44], where each side is dependent on the presence of the others. For example, on a ride-hailing platform, riders may feel reluctant to book a ride if there are not enough drivers available (leading to long wait times), and drivers may not be willing to join the platform if they believe that there are not enough potential riders (resulting in lower income).

• Strategy

The analysis shows that InDrive recognizes that the success of a platform depends on achieving a critical mass on each side, ensuring enough participants to create value for all users. The strategy adopted by InDrive is the “value creation network effect” that ensures the balancing of multiple sides to resolve the chicken-and-egg problem. Figure 2 illustrates that the value creation mechanism begins with platform governance and extends towards different sides, such as driver and rider, driver and third party, third party and investor, investor and rider.

• Platform governance

InDrive has promoted effective governance for maintaining trust, fairness, and transparency among stakeholders by setting rules, policies, and standards that ensure a positive user experience and drive value creation. The set standards and regulatory framework apply to all the sides involved in the platform (Figure 2).

“We are on a mission to provide affordable and secure rides […], a well-established regulatory rating system has been introduced in the app for both riders and drivers”.

[InDrive Manager 2]

• Matching demand and supply

InDrive takes a unique approach, differentiating itself by allowing passengers to negotiate prices with drivers. Passengers can suggest a fare they are willing to pay, and nearby drivers have the option to accept, decline, or counter the offer (Figure 2).

“InDrive has made people‘s lives more comfortable, by providing more accessible rides […], we offer fair pricing and incentive opportunities not only to the riders but also to the drivers through negotiation […], mutually agreed pricing mechanism is one key factor”.

[InDrive Manager 1]

• Driver support program

InDrive has developed driver incentive programs that reward drivers for providing high-quality service, completing a certain number of trips, or maintaining high ratings. Incentives motivate drivers to stay active (Figure 2).

“Our new campaign builds on the idea of supporting drivers for efficiency and growth, not only relaxing their working conditions, but also providing better trip values, incentives, and fewer service charges […], our business model, results in better prices, not at the expense of the earnings of the drivers”.

[InDrive Manager 2]

• Supportive community

InDrive encourages networking, mentorship, and knowledge exchange among investors and third parties, creating an environment that nurtures creativity and fosters a sense of belonging toward market expansion (Figure 2).

“Collaboration with the banks, car inspection companies, driving schools, NGO’s, leasing companies are some of the reasons of penetration in the competitive market […]”.

[InDrive Employer 1]

• Value-added services

InDrive has considered factors like local culture, regulations, and transportation demands to provide more personalized experiences for involved stakeholders. Here, investors play a great role in making InDrive a sustainable platform (Figure 2). Without collaborations, it is difficult for a company to bridge the market gaps in a short span.

“We are highly motivated to reveal more innovative products and services compatible with market gaps […], our mission is to mitigate traffic jamming issues […], making an indirect contribution to the environment […], and lowering air pollution emissions”.

[InDrive Employer 2]

4.2.2. Balancing the “Matchmaking” Problem

• Issue

The matchmaking problem refers to the challenge of competently and effectively connecting two or more user groups associated with a platform to interact and create value for each other [5,45]. The matchmaking problem arises from an imbalanced interaction. For example, in a ride-hailing platform, riders are looking for rides and drivers are providing rides, so the role of the platform is to match the available drivers with the rider’s request in real time [46].

• Strategy

In platform-related problems, successful matchmaking necessitates an understanding of the associated unique challenges and an ongoing commitment to tackling them. These problems can be solved by combining facts and insights from the academic literature with practical experiences. To resolve the matchmaking issue, InDrive has developed a “matchmaking value design framework” that illustrates potential solutions to match demand and supply (Figure 3). The success of InDrive relies on facilitating interactions and associations between different user groups to create proper and feasible matches.

“We are focused on user-centric approaches […], as the platform grows and user behavior evolves, ongoing efforts to modify and adapt strategies are required to encourage the platform usage”.

[InDrive Employer 1]

Figure 3 illustrates how the rider sends a ride request to the platform by specifying a low fare. After comparing the other ride-hailing platforms, InDrive has determined the right pricing model that is “negotiation-based pricing anatomy”. Rider has the option to select the driver of their choice from the number of available options.

“Though I have Uber and Careem apps, I prefer to use InDrive […], I can directly talk with the driver to reduce the fare if it does not fit with my budget”.

[InDrive Rider 1]

Moreover, drivers utilize the same service option that can be applicable for rider selection with negotiable fare. Riders can make ride decisions by looking at the driver’s picture, name, gender, arrival time, rating, and the number of rides per day. On the other hand, drivers can accept or reject the offer based on the rider’s rating and past ride reviews, and the same applies to the rider. Finally, at a mutually acceptable fare, a ride can be initiated.

“It’s been over 6 months since I started driving with InDrive, I started driving because I wanted to make money for myself […], InDrive allows me to select flexible working hours that help me to manage my family, InDrive offers us unique options to select riders, and I usually accept female riders. I think InDrive provides a platform that empowers and gives confidence to female drivers to create a better life for themselves and their families”.

[InDrive Female Driver 1]

Case 1 indicates the driver or rider selection option with a negotiable low fare. Case 2 describes the selection of female drivers with high passenger ratings. Case 3 shows that the rider and driver have the choice to select the nearest available driver by fixing the exact route, as the arrival time of the driver is usually listed in the driver’s published profile (Figure 3).

4.2.3. Balancing of the “Multi-Homing” Problem

• Issue

The multi-homing problem refers to a situation in which users of one platform are engaged with multiple competing platforms that offer similar services. These users are not exclusively loyal to a single platform that they use. This situation can raise several challenges for platform businesses, such as reduced network effect, poor user engagement, and increased competition [47]. Therefore, the development of an effective monetization policy to generate maximum revenue while keeping a strong focus on user engagement and retention is challenging, especially in the current era, when the service platform competition is very high. This lock-in can reduce mobility and lead to diminishing the capability of the platform’s innovation.

• Strategy

To resolve multi-homing issues, it is necessary to introduce effective strategies to incentivize users in a way to let them prioritize one platform over another by themselves. The results show that InDrive has made a great service innovation in implementing the “Single-homing effect” by introducing extended services to its business model to provide a superior user experience and create a reliable driver base, while creating value, as shown in Figure 4. These services are aligned with InDrive’s unique value propositions, target users, and competitive market. For developing these services, the InDrive platform has understood the user behavior and priorities and accordingly, they respond to the market dynamics to gain success.

• Extended services

Along with such proposed value-addeds as the driver selection option in the app, negotiable fare, female driver availability, and arrival time calculation, InDrive has announced a free IT training center in Pakistan (Figure 4). Access to basic IT education for platform users is a steppingstone to a bright and flourishing future. The center is equipped with the technology and infrastructure required for IT training and acquisition of basic platform usage skills.

InDrive is expanding its business model through collaborations with NGOs (e.g., JDC Foundation). Their ongoing projects are designed to empower younger generations by promoting education and employment opportunities that motivate them to contribute to economic growth.

“I would like to thank InDrive, as this platform resolves many problems by providing the opportunity to earn well, especially during this economic crisis in our country; you can work for flexible hours, set your own fares, and select passengers as per your will. I would recommend that, whether you’re unemployed or employed, join InDrive. It’ll help you in any kind of situation you may be in”.

[InDrive Male Driver 2]

One of the most significant issues in Pakistan is traffic congestion; the ride time using any transportation can be increased easily. This situation leads to unnecessary fatigue and waste of resources that can be dangerous for drivers. The idea behind the offering of pit stops is to allow drivers to recharge to perform at their best. These offices also offer free training programs by which drivers can learn how to improve their payments, ratings, and reviews.

“The company mission is to support people either drivers or passengers […], Pit stop is a way to facilitate drivers’ community and help them to improve their earnings and skills. We try to make their work comfortable and stress-free as much as possible”.

[InDrive Employer 2]

• Superior user experience and reliable driver base

The initiative taken by InDrive to balance user groups helps to promote a positive user experience. When there is a balanced number of drivers and riders, wait times are reduced and riders can find rides quickly. This enhances the user experience (of both driver and rider), leading to higher satisfaction and higher retention of the platform.

“Before booking the ride, I compare prices with Uber and Careem, and every time I find InDrive offers the low fare ride […]”.

[InDrive Rider 2]

“I have had a great experience of working for InDrive over the last two years […], being a driver, I have inspired and motivated many women […], able to save money after paying off all the monthly expenses, work with flexible hours, able to manage my work life with home life. It gives me a calm feeling”.

[InDrive Female Driver 1]

4.3. Aligning InDrive with the Sustainable Development Goals (SDGs)

From the interview analysis, it is observed that InDrive aligns its business strategies with 8 key Sustainable Development Goals (SDGs 4, 5, 8, 9, 10, 11, 12, 17) by promoting economic empowerment, social inclusion, and sustainable mobility, as shown in

Table 5. InDrive business strategies in achieving SDGs (source: author).

InDrive Business Strategies	Sustainable Development Goals
Education for drivers: Offers programs or incentives for drivers to adopt vehicle maintenance. Introduces free IT training centers.	Goal 4: Quality education
Women-focused initiatives: Programs like women-only ride options or ensuring safety for female drivers and riders.	Goal 5: Gender equality
Empowering drivers: Allows drivers to negotiate fares with riders, ensuring fair pricing and potentially higher earnings. Driver support program: Offers flexible work opportunities.	Goal 8: Decent work and economic growth
Digital innovation: Utilizes technology for peer-to-peer interactions, promoting efficiency (fast arrival time). Partnerships with local governments and NGOs: Collaboration to enhance mobility infrastructure and offer safer ride services.	Goal 9: Industry, innovation, and infrastructure Goal 17: Partnership for the goals
Negotiation-based pricing: This model allows people from lower income brackets to find affordable rides compared to fixed-price systems. Diversity: Encourages drivers from different genders, communities, and backgrounds	Goal 10: Reduced inequalities
Promoting ride-sharing: Encouraging shared rides helps in reducing the number of vehicles on the road, which reduces pollution.	Goal 11: Sustainable cities and communities
Optimized travel routes: The platform’s negotiation model can promote direct and optimized travel routes, reducing fuel consumption and emissions.	Goal 12: Responsible consumption and production

.

Table 5 shows that by integrating SDG-related initiatives into its operations, InDrive has establish itself as a sustainable and responsible ride-hailing service, advancing global sustainability goals while empowering local communities and economies.

4.4. Limitations of the InDrive Business Model

Despite its innovative approach, the InDrive business model has several limitations that may impact its long-term scalability and market sustainability. First, the success of InDrive heavily relies on user participation in price negotiation. In markets with lower digital literacy or resistance to dynamic pricing, adoption may be limited, affecting platform growth. Second, with lower commission rates than its competitors, InDrive may face challenges in achieving long-term profitability. Lastly, InDrive has adopted cost-effective business structures to achieve success in the platform business at the micro level; however, as InDrive is a new entrant into the market, it remains unclear what new strategies it can bring to the meso (expanded market) and macro (mass market) levels.

5. Conclusions

This study expands upon existing theoretical frameworks of MSPs by introducing a hybrid model that emphasizes negotiated pricing, decentralized governance, and social sustainability, particularly in emerging economies. It varies from traditional MSP studies by offering a new perspective on market adaptability and platform governance in regions with unique socio-economic challenges like Pakistan.

Our findings support previous research [4,7,8,45] on the importance of platform incentives in driver retention. However, unlike studies focused on developed markets, our analysis highlights additional challenges in emerging economies, particularly regulatory issues and infrastructure limitations. This suggests that platform strategies must be adapted to local market conditions to remain effective.

This paper concludes that the primary value of a platform business often comes from the interactions and transactions among different user groups. Balancing ensures that these interactions happen regularly, resulting in value creation and well-being for all participants. To be a successful service in the economy, it is necessary to differentiate your platform by offering unique features, services, or experiences that competitors do not provide. This can create a strong value proposition that encourages users to prioritize your platform. Following this approach, the InDrive platform creates an ecosystem where users can interact, transact, and originate value through their participation by successfully aligning the needs and interests of representatives from multiple sides and implementing innovative strategies to resolve platform-related issues.

Moreover, this study explores value creation strategies for sustaining multi-sided platforms, focusing on the ride-hailing sector in emerging economies. While the findings contribute to a deeper understanding of platform sustainability, further research is needed to validate these insights across different market conditions and regulatory environments.

5.1. Academic and Practical Implications

This research contributes to the academic discussion on MSP sustainability by redirecting the analytical focus from mainly Western-centric platform models to the contextual realities of emerging markets, with a specific emphasis on the ride-hailing sector. By examining a negotiation-based pricing framework, user-driven value creation mechanisms, and sustainability-oriented operational strategies, this research challenges existing theoretical models and extends the conceptual understanding of platform governance.

Furthermore, the findings of this research provide scalable and adaptable strategies for ride-hailing platforms seeking to enhance sustainability, improve user engagement, and navigate regulatory challenges in emerging economies. By highlighting the successes and limitations of InDrive’s model, the study serves as a practical guide for platform operators, investors, and policymakers aiming to foster resilient and inclusive digital mobility ecosystems. This research also offers guidance of practical significance for MSP operators to further optimize their schemes and ensure sustained value creation for all involved stakeholders through personalized well-being implementation. Finally, the InDrive case provides valuable insights to understand the complexities of multi-sided platforms in emerging markets, especially in developing countries where the sharing concept needs to follow cultural sensitivity and localized policies.

5.2. Limitations and Future Research Directions

While this study offers valuable insights into the sustainability of multi-sided platforms (MSPs) within Pakistan’s ride-hailing sector, certain limitations must be acknowledged. First, access to comprehensive, real-time data from ride-hailing platforms remains constrained due to corporate confidentiality policies, limiting the empirical analysis. Second, although the study examines driver and rider experiences, it does not incorporate advanced behavioral analytics, such as AI-driven user insights or large-scale data modeling, which could provide a more granular understanding of user dynamics. Third, the study’s focus on the Pakistani market presents a limitation in terms of the broader applicability of its findings, as the success and challenges of ride-hailing services are heavily influenced by country-specific cultural, economic, and regulatory factors. Variations in consumer behavior, market competition, infrastructure, and policy frameworks across different regions may impact the effectiveness and scalability of strategies that have proven successful in Pakistan. Consequently, the generalizability of the study’s insights to other developing or developed markets remains constrained and requires careful contextual adaptation.

Additionally, future research addressing these limitations will contribute to a more comprehensive understanding of MSP sustainability. Enhancing data granularity, the use of quantitative approaches, expanding the geographic scope of analysis, and integrating AI-driven market analytics will be essential for generating deeper and more nuanced insights into platform dynamics and user behaviors.