Internal Publication
Business Model Innovation for Ambulance Systems in Low-and Middle-Income Countries:“Coordination and Competition”
Several low- and middle-income countries’ emergency transportation systems (ETSs) do not have a centralized emergency number. Instead, they have many independent ambulance providers, each with a small number of ambulances. As a result, ETSs in these contexts lack coordination and ambulances. Using a free-entry equilibrium model, we show that in such decentralized systems, the probability that any given call can be served by at least one ambulance, that is, its coverage, is at most 71.54%, regardless of the ETS’s profitability. We examine three business models that can address the ETS’s lack of coordination and ambulances: (i) a competitor-only business model, where an entrepreneur enters the ETS and acquires ambulances to compete with existing providers; (ii) a platform business model, where an entrepreneur coordinates existing providers; and (iii) an innovative platform-plus business model, where an entrepreneur combines (i) and (ii): setting-up a platform and acquiring platform-owned ambulances. We also examine a government-run platform that takes no commissions from providers. Using a game-theoretic approach, we find that it is optimal for all platform models to incentivize all providers to join. However, only the government-run platform may incentivize providers to acquire additional ambulances. Furthermore, a government-run platform offers higher coverage than a platform-plus only when the platform’s power to coordinate ambulance providers is moderate. Our results can help entrepreneurs and policymakers in LMICs navigate various tradeoffs in improving their countries’ ETS.
Uploaded by: Hassan MontazeriAuthor: Gernert, Andreas | ORCID: https://orcid.org/0000-0002-0497-3526
Co-author: Calmon, Andre P | ORCID: https://orcid.org/0000-0002-9017-1625
Co-author: Romero, Gonzalo | ORCID: https://orcid.org/0000-0002-5529-3117
Co-author: Van Wassenhove, Luk N
Institution: Kühne Logistics University | Centre: Sustainable Operations for Resource Management and Food Supply (SCO)
Type: Journal article | English | Peer Reviewed
Subjects: Logistics
Published in: Production and Operations Management, 1937-5956
Publisher of document: SAGE Publications
Date: February 8, 2024
https://journals.sagepub.com/doi/abs/10.1177/10591478231224973
Copyright: SAGE Publications
