Mobile Hailing Technology and Taxi Driving Behaviors

Yanwen Wang (), Chunhua Wu () and Ting Zhu ()
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Yanwen Wang: UBC Sauder School of Business, University of British Columbia, Vancouver, British Columbia V6T 1Z2, Canada
Chunhua Wu: UBC Sauder School of Business, University of British Columbia, Vancouver, British Columbia V6T 1Z2, Canada
Ting Zhu: Krannert School of Management, Purdue University, West Lafayette, Indiana 47907

Marketing Science, 2019, vol. 38, issue 5, 734-755

Abstract: This paper investigates the impact of mobile hailing technology on taxi driving behaviors. A controversial feature of mobile hailing applications in China is the disclosure of not only pickup locations but also drop-off destinations before drivers accept offers. It provides taxi drivers two different mechanisms to improve their hourly earnings: reducing cruising time and selecting more profitable trips. We examine 3.6-terabyte minute-by-minute geolocation data of 2,106 single-shift drivers in Beijing. A modified change-point model is proposed to infer the adoption decisions and estimate the changes in driving behaviors. We show that mobile hailing technology adoption is associated with an average increase of 6.8% in hourly earnings, equivalent to an extra CNY 750 monthly income. A typical taxi driver greatly improves hourly earnings through trip selection in favor of longer trips rather than aiming for cruising-time reduction. We find that the relative importance of cruising-time reduction and trip selection depends on driver skills and market conditions. We do not find market expansions on the number of trips or working hours, but rather a redistribution of realized trips toward long distances.

Keywords: mobile hailing apps; taxi industry; technology adoption; Didi (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (5)

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