Does Online Ride-Hailing Service Improve the Efficiency of Taxi Market? Evidence from Shanghai

Yiyuan Ma, Ke Chen, Youzhi Xiao and Rong Fan
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Yiyuan Ma: Antai College, Shanghai Jiao Tong University, 1954 Huashan Road, Shanghai 200030, China
Ke Chen: Institute of Economics, Shanghai Academy of Social Sciences, 7/622 Middle Huaihai Road, Shanghai 200020, China
Youzhi Xiao: Peking University HSBC Business School, Peking University, University Town, Shenzhen 508055, China
Rong Fan: School of Management, Fudan University, 670 Guoshun Road, Shanghai 200433, China

Sustainability, 2022, vol. 14, issue 14, 1-16

Abstract: Online ride-hailing services, which are characterized by online matching, are generally considered improving the work efficiency of taxi drivers and bring disruptive changes to the taxi market. We use the historical and contemporaneous trip-level big data of Shanghai online ride-hailing drivers and traditional cruising taxi drivers, structure the data into shift and hour levels, and compare the two types in terms of efficiency. The comparison results indicate that the overall capacity utilization rate of online ride-hailing drivers is slightly higher than that of cruising taxi drivers, but it is mainly driven by part-time drivers. We confirm the role of flexible work and market scale in improving capacity utilization, but do not find the impact of online matching mechanisms. From the perspective of the drivers’ work efficiency, the similar capacity utilization of the two types of full-time workers is consistent with Cramer and Krueger’s (2016) evidence in New York. Online matching and street searching achieve almost equal efficiency in densely populated urban areas. However, from the perspective of supply and demand matching, online ride-hailing creates a more flexible supply and is more adaptable to the changes in demand, which improves the overall taxi market efficiency.

Keywords: labor supply; capacity utilization rate; part-time driver; mechanism (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
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