• Corpus ID: 3598730

Labor Market Equilibration : Evidence from Uber

@inproceedings{Horton2017LaborME,
  title={Labor Market Equilibration : Evidence from Uber},
  author={John Joseph Horton},
  year={2017}
}

• J. Horton
• Published 2017
• Economics

Using a city-week panel of US ride-sharing markets created by Uber, we estimate the effects of sudden fare changes on market outcomes, focusing 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 equilibrium 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 primarily 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.