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Ride-Sharing Markets Re-Equilibrate

Jonathan V. Hall, John Horton and Daniel T. Knoepfle

No 30883, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Following Uber-initiated fare increases, drivers make more money per trip and, initially, more per hour-worked. Drivers begin to work more hours. However, this increase in hours-worked—combined with a reduction in demand from a higher fare—has a business stealing effect, with drivers spending a smaller fraction of working hours transporting passengers. This market adjustment brings the hourly earnings rate back to about the rate that prevailed before the fare increase, in roughly two months. Passengers are partially compensated for higher prices by shorter wait times, but during the period covered by our data, fare increases likely reduced passenger welfare.

JEL-codes: J01 R4 R41 (search for similar items in EconPapers)
Date: 2023-02
New Economics Papers: this item is included in nep-lab, nep-pay, nep-tre and nep-ure
Note: LS PR
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Citations: View citations in EconPapers (1)

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