Business Model Innovation for Ambulance Systems in Low- and Middle-Income Countries

The emergency transportation systems (ETSs) of several low- and middle-income countries (LMICs) lack 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 have limited 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, i.e. its coverage, is at most 71.54%, regardless of the ETS’s profitability. We examine two business models that can address the ETS’s lack of coordination and ambulances: (i) a platform, where an entrepreneur coordinates existing providers; and (ii) a platform-plus, where an entrepreneur sets up a platform and acquires 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 trade-offs in improving their countries’ ETS.