Highlights Minimum wage motivates transportation network companies to hire more drivers. Minimum wage pushes down ride prices and improves passenger pickup time. Capping the number of TNC vehicles will not protect drivers. TNC drivers bear the most of the risk in demand uncertainty. Autonomous mobility-on-demand service is not a feasible business model unless investment and operation cost is below 56000$/year.

    Abstract We evaluate the impact of three proposed regulations of transportation network companies (TNCs) like Uber, Lyft and Didi: (1) A minimum wage for drivers, (2) a cap on the number of drivers or vehicles, and (3) a per-trip congestion tax. The impact is assessed using a queuing theoretic equilibrium model which incorporates the stochastic dynamics of the app-based ride-hailing matching platform, the ride prices and driver wages established by the platform, and the incentives of passengers and drivers. We show that a floor placed under driver earnings can push the ride-hailing platform to hire more drivers and offer more rides, at the same time that passengers enjoy faster rides and lower total cost, while platform rents are reduced. Contrary to standard competitive labor market theory, enforcing a minimum wage for drivers benefits both drivers and passengers, and promotes the efficiency of the entire system. This surprising outcome holds for almost all model parameters, and it occurs because the wage floor curbs TNC labor market power. In contrast to a wage floor, imposing a cap on the number of vehicles hurts drivers, because the platform reaps all the benefits of limiting supply. The congestion tax has the expected impact: fares increase, wages and platform revenue decrease. We also construct variants of the model to briefly discuss platform subsidy, platform competition, and autonomous vehicles.


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    Titel :

    Regulating TNCs: Should Uber and Lyft set their own rules?


    Beteiligte:
    Li, Sen (Autor:in) / Tavafoghi, Hamidreza (Autor:in) / Poolla, Kameshwar (Autor:in) / Varaiya, Pravin (Autor:in)


    Erscheinungsdatum :

    2019-09-10


    Format / Umfang :

    33 pages




    Medientyp :

    Aufsatz (Zeitschrift)


    Format :

    Elektronische Ressource


    Sprache :

    Englisch