Labor market equilibration: Evidence from Uber

Using a city-week panel of U.S. ride-sharing markets created by Uber, we estimate the effects of sudden fare changes on market outcomes, fo-cusing on the supply-side. We explore both the short-run dynamics of market adjustment, as well as the eventual long-run equilibrium. We find that the driver hourly earnings rate—essentially the market equilib-rium wage—moves immediately in the same direction as a fare change, but that these effects are short-lived. The prevailing wage returns to its pre-change level within about 8 weeks. This return is achieved primar-ily through permanent changes in driver " utilization, " or the fraction of hours-worked that are spent transporting passengers. Our results imply that the driver supply of labor to ride-sharing markets is highly elastic, most likely because drivers face no quantity restrictions on how many hours to supply and new drivers face minimal barriers to entry.

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Labor market equilibration: Evidence from Uber
Hall, J., Horton, J. and Knoepfle, D. (2017), Labor market equilibration: Evidence from Uber, New York University Working Paper.

Metadata

  • Research publication
  • United States
  • Yes
  • transport
  • On-location platform-determined routine work
  • Uber
  • worker demographics, income, work intensity, working time quality, work-life balance
  • English
  • New York University (Research institute)
  • Quantitative research
  • 2017
  • Open access
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