Uber economics

A new US study shows traditional taxi drivers are five times more likely to work in excess of 50 hours a week than Uber drivers, yet their earnings are comparable


Photo: Reuters
Photo: Reuters

Is the Uber driver the role model for the future of work? He works for himself, has flexible working hours and knows that he needs to get good customer responses to build his reputation. A new paper by economists Jonathan V. Hall and Alan B. Krueger uses data on driving histories, schedules and earnings of drivers provided by the taxi app as well as from two surveys they conducted.

One of the most interesting insights is that traditional taxi drivers and chauffeurs are five times more likely to work in excess of 50 hours a week compared with Uber drivers. Yet their earnings are comparable. One possible explanation is that the high price of taxi medallions in US cities forces those who acquire them to work longer to recover their initial costs. Another explanation is that Uber drivers maximize their hourly earnings by entering the market only when prices surge. It is also possible that the customer grading system has encouraged Uber drivers to keep their clients happy. A similar study on the Indian gig economy would be welcome.

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