IDEAS home Printed from https://ideas.repec.org/a/inm/ormnsc/v67y2021i1p166-184.html
   My bibliography  Save this article

When Transparency Fails: Bias and Financial Incentives in Ridesharing Platforms

Author

Listed:
  • Jorge Mejia

    (Kelley School of Business, Indiana University, Bloomington, Indiana 47405;)

  • Chris Parker

    (Kogod School of Business, American University, Washington, District of Columbia 20016)

Abstract

Providing transparency into operational processes can change consumer and worker behavior. However, it is unclear whether operational transparency is beneficial with potentially biased service providers. We explore this in the context of ridesharing platforms where early evidence documents bias similar to what has been observed in traditional transportation systems. Platforms responded by reducing operational transparency through removing information about riders’ gender and race from the ride request presented to drivers. However, following this change, bias may still manifest through driver cancelation after a request is accepted, at which point the rider’s picture is displayed. Our primary research question is to what extent a rider’s gender, race, and perception of support for lesbian, gay, bisexual, and transgender (LGBT) rights impact cancelation rates. We investigate this through a large field experiment on a major ridesharing platform in Washington, DC. By manipulating rider names and profile pictures, we observe drivers’ behavior patterns in accepting and canceling rides. Our results confirm that bias at the ride request stage has been eliminated. However, after acceptance, racial and LGBT biases are persistent, while we find no evidence of gender biases. We also explore whether peak times moderate (through increased pay to drivers) or exacerbate (by signaling that there are many riders, allowing drivers to be more selective) these biases. We find a moderating effect of peak timing, with lower cancelation rates for non-Caucasian riders. We do not find a similar moderating effect for riders that signal support for the LGBT community.

Suggested Citation

  • Jorge Mejia & Chris Parker, 2021. "When Transparency Fails: Bias and Financial Incentives in Ridesharing Platforms," Management Science, INFORMS, vol. 67(1), pages 166-184, January.
    • Handle: RePEc:inm:ormnsc:v:67:y:2021:i:1:p:166-184
    DOI: 10.1287/mnsc.2019.3525
    as

    Download full text from publisher

    File URL: https://doi.org/10.1287/mnsc.2019.3525
    Download Restriction: no
    File URL: https://libkey.io/10.1287/mnsc.2019.3525?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Jenny C. Aker & Christopher Ksoll & Travis J. Lybbert, 2012. "Can Mobile Phones Improve Learning? Evidence from a Field Experiment in Niger," American Economic Journal: Applied Economics, American Economic Association, vol. 4(4), pages 94-120, October.
    2. Joseph E. Stiglitz, 2003. "Information and the Change in the Paradigm in Economics, Part 1," The American Economist, Sage Publications, vol. 47(2), pages 6-26, October.
    3. Weichselbaumer, Doris, 2003. "Sexual orientation discrimination in hiring," Labour Economics, Elsevier, vol. 10(6), pages 629-642, December.
    4. Arunachalam Narayanan & Brent B. Moritz, 2015. "Decision Making and Cognition in Multi-Echelon Supply Chains: An Experimental Study," Production and Operations Management, Production and Operations Management Society, vol. 24(8), pages 1216-1234, August.
    5. Chris Parker & Kamalini Ramdas & Nicos Savva, 2016. "Is IT Enough? Evidence from a Natural Experiment in India’s Agriculture Markets," Management Science, INFORMS, vol. 62(9), pages 2481-2503, September.
    6. Marianne Bertrand & Sendhil Mullainathan, 2004. "Are Emily and Greg More Employable Than Lakisha and Jamal? A Field Experiment on Labor Market Discrimination," American Economic Review, American Economic Association, vol. 94(4), pages 991-1013, September.
    7. Roberts, John, 2009. "No one is perfect: The limits of transparency and an ethic for 'intelligent' accountability," Accounting, Organizations and Society, Elsevier, vol. 34(8), pages 957-970, November.
    8. Kono, Daniel Y., 2006. "Optimal Obfuscation: Democracy and Trade Policy Transparency," American Political Science Review, Cambridge University Press, vol. 100(3), pages 369-384, August.
    9. Cecilia Rouse & Claudia Goldin, 2000. "Orchestrating Impartiality: The Impact of "Blind" Auditions on Female Musicians," American Economic Review, American Economic Association, vol. 90(4), pages 715-741, September.
    10. Ryan W. Buell, 2017. "Last Place Aversion in Queues," Harvard Business School Working Papers 18-053, Harvard Business School, revised Oct 2019.
    11. Benjamin Edelman & Michael Luca & Dan Svirsky, 2017. "Racial Discrimination in the Sharing Economy: Evidence from a Field Experiment," American Economic Journal: Applied Economics, American Economic Association, vol. 9(2), pages 1-22, April.
    12. Gordon Burtch & Seth Carnahan & Brad N. Greenwood, 2018. "Can You Gig It? An Empirical Examination of the Gig Economy and Entrepreneurial Activity," Management Science, INFORMS, vol. 64(12), pages 5497-5520, December.
    13. Mohr, Lois A. & Bitner, Mary Jo, 1995. "The role of employee effort in satisfaction with service transactions," Journal of Business Research, Elsevier, vol. 32(3), pages 239-252, March.
    14. Michael Freeman & Nicos Savva & Stefan Scholtes, 2017. "Gatekeepers at Work: An Empirical Analysis of a Maternity Unit," Management Science, INFORMS, vol. 63(10), pages 3147-3167, October.
    15. Joseph E. Stiglitz, 2002. "Information and the Change in the Paradigm in Economics," American Economic Review, American Economic Association, vol. 92(3), pages 460-501, June.
    16. Nathan Berg & Donald Lien, 2002. "Measuring The Effect Of Sexual Orientation On Income: Evidence Of Discrimination?," Contemporary Economic Policy, Western Economic Association International, vol. 20(4), pages 394-414, October.
    17. Benjamin Edelman & Micahel Luca, 2014. "Digital Discrimination: The Case of Airbnb.com," Harvard Business School Working Papers 14-054, Harvard Business School.
    18. Yanbo Ge & Christopher R. Knittel & Don MacKenzie & Stephen Zoepf, 2016. "Racial and Gender Discrimination in Transportation Network Companies," NBER Working Papers 22776, National Bureau of Economic Research, Inc.
    19. Chinander, Karen R. & Schweitzer, Maurice E., 2003. "The input bias: The misuse of input information in judgments of outcomes," Organizational Behavior and Human Decision Processes, Elsevier, vol. 91(2), pages 243-253, July.
    20. Ryan W. Buell & Michael I. Norton, 2011. "The Labor Illusion: How Operational Transparency Increases Perceived Value," Management Science, INFORMS, vol. 57(9), pages 1564-1579, February.
    21. Lurie, Nicholas H. & Swaminathan, Jayashankar M., 2009. "Is timely information always better? The effect of feedback frequency on decision making," Organizational Behavior and Human Decision Processes, Elsevier, vol. 108(2), pages 315-329, March.
    22. Andrea C. Morales, 2005. "Giving Firms an "E" for Effort: Consumer Responses to High-Effort Firms," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 31(4), pages 806-812, March.
    23. Peter Cohen & Robert Hahn & Jonathan Hall & Steven Levitt & Robert Metcalfe, 2016. "Using Big Data to Estimate Consumer Surplus: The Case of Uber," NBER Working Papers 22627, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Rao, Manaswini & Shenoy, Ashish, 2023. "Got (clean) milk? Organization, incentives, and management in Indian dairy cooperatives," Journal of Economic Behavior & Organization, Elsevier, vol. 212(C), pages 708-722.
    2. Wencui Han & Xunyi Wang & Mehmet Eren Ahsen & Sunil Wattal, 2022. "The Societal Impact of Sharing Economy Platform Self-Regulations—An Empirical Investigation," Information Systems Research, INFORMS, vol. 33(4), pages 1303-1323, December.
    3. Adam Millard-Ball & Liwei Liu & Whitney Hansen & Drew Cooper & Joe Castiglione, 2023. "Where ridehail drivers go between trips," Transportation, Springer, vol. 50(5), pages 1959-1981, October.
    4. Olga Abramova, 2022. "No matter what the name, we’re all the same? Examining ethnic online discrimination in ridesharing marketplaces," Electronic Markets, Springer;IIM University of St. Gallen, vol. 32(3), pages 1419-1446, September.
    5. Yu-Kai Lin & Arun Rai & Yukun Yang, 2022. "Information Control for Creator Brand Management in Subscription-Based Crowdfunding," Information Systems Research, INFORMS, vol. 33(3), pages 846-866, September.
    6. Long He & Sheng Liu & Zuo‐Jun Max Shen, 2022. "Smart urban transport and logistics: A business analytics perspective," Production and Operations Management, Production and Operations Management Society, vol. 31(10), pages 3771-3787, October.
    7. Young Woong Park & Glenn B. Voss & Zannie Giraud Voss, 2023. "Advancing customer diversity, equity, and inclusion: Measurement, stakeholder influence, and the role of marketing," Journal of the Academy of Marketing Science, Springer, vol. 51(1), pages 174-197, January.
    8. Yinchu Zhu & Ilya O. Ryzhov, 2022. "Optimal data-driven hiring with equity for underrepresented groups," Papers 2206.09300, arXiv.org.
    9. Amalia R. Miller & Kamalini Ramdas & Alp Sungu, 2023. "Browsers Don’t Lie? Gender Differences in the Effects of the Indian COVID-19 Lockdown on Digital Activity and Time Use," NBER Working Papers 31919, National Bureau of Economic Research, Inc.
    10. Hongchang Wang & Eric Overby, 2023. "Do Political Differences Inhibit Market Transactions? An Investigation in the Context of Online Lending," Management Science, INFORMS, vol. 69(8), pages 4685-4706, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ruomeng Cui & Jun Li & Dennis J. Zhang, 2020. "Reducing Discrimination with Reviews in the Sharing Economy: Evidence from Field Experiments on Airbnb," Management Science, INFORMS, vol. 66(3), pages 1071-1094, March.
    2. Yongwook Paik & Christos A. Makridis, 2023. "The social value of a ridesharing platform: a hedonic pricing approach," Empirical Economics, Springer, vol. 64(5), pages 2125-2150, May.
    3. Brad Greenwood & Idris Adjerid & Corey M. Angst & Nathan L. Meikle, 2022. "How Unbecoming of You: Online Experiments Uncovering Gender Biases in Perceptions of Ridesharing Performance," Journal of Business Ethics, Springer, vol. 175(3), pages 499-518, January.
    4. Heather Antecol & Deborah A. Cobb-Clark & Eric Helland, 2014. "Bias in the Legal Profession: Self-Assessed versus Statistical Measures of Discrimination," The Journal of Legal Studies, University of Chicago Press, vol. 43(2), pages 323-357.
    5. Chen Liang & Yili Hong & Bin Gu, 2017. "Home Bias in Global Employment," Working Papers 17-06, NET Institute.
    6. Stijn Baert, 2014. "Career lesbians. Getting hired for not having kids?," Industrial Relations Journal, Wiley Blackwell, vol. 45(6), pages 543-561, November.
    7. Ge, Yanbo & Knittel, Christopher R. & MacKenzie, Don & Zoepf, Stephen, 2020. "Racial discrimination in transportation network companies," Journal of Public Economics, Elsevier, vol. 190(C).
    8. Ryan W. Buell & Ethan Porter & Michael I. Norton, 2013. "Surfacing the Submerged State: Operational Transparency Increases Trust in and Engagement with Government," Harvard Business School Working Papers 14-034, Harvard Business School, revised Aug 2018.
    9. Ryan W. Buell & Tami Kim & Chia-Jung Tsay, 2017. "Creating Reciprocal Value Through Operational Transparency," Management Science, INFORMS, vol. 63(6), pages 1673-1695, June.
    10. Yongwook Paik & Sukhun Kang & Robert Seamans, 2019. "Entrepreneurship, innovation, and political competition: How the public sector helps the sharing economy create value," Strategic Management Journal, Wiley Blackwell, vol. 40(4), pages 503-532, April.
    11. Kartik K. Ganju & Hilal Atasoy & Jeffery McCullough & Brad Greenwood, 2020. "The Role of Decision Support Systems in Attenuating Racial Biases in Healthcare Delivery," Management Science, INFORMS, vol. 66(11), pages 5171-5181, November.
    12. Söderlund, Magnus & Sagfossen, Sofie, 2017. "The consumer experience: The impact of supplier effort and consumer effort on customer satisfaction," Journal of Retailing and Consumer Services, Elsevier, vol. 39(C), pages 219-229.
    13. Kas, Judith, 2022. "The effect of online reputation systems on intergroup inequality," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 96(C).
    14. Lee, Kyungwon & Hakstian, Anne-Marie & Williams, Jerome D., 2021. "Creating a world where anyone can belong anywhere: Consumer equality in the sharing economy," Journal of Business Research, Elsevier, vol. 130(C), pages 221-231.
    15. Drydakis, Nick, 2009. "Sexual orientation discrimination in the labour market," Labour Economics, Elsevier, vol. 16(4), pages 364-372, August.
    16. Doris Weichselbaumer, 2015. "Testing for Discrimination against Lesbians of Different Marital Status: A Field Experiment," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 54(1), pages 131-161, January.
    17. Barbara A. Bliss & Joseph Engelberg & Mitch Warachka, 2021. "Affiliation bias in the online market for rental accommodation," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 49(1), pages 224-266, March.
    18. Anja Lambrecht & Catherine Tucker, 2019. "Algorithmic Bias? An Empirical Study of Apparent Gender-Based Discrimination in the Display of STEM Career Ads," Management Science, INFORMS, vol. 65(7), pages 2966-2981, July.
    19. Mohammed Alyakoob & Mohammad S. Rahman, 2022. "Shared Prosperity (or Lack Thereof) in the Sharing Economy," Information Systems Research, INFORMS, vol. 33(2), pages 638-658, June.
    20. Farajallah, Mehdi & Hammond, Robert G. & Pénard, Thierry, 2019. "What drives pricing behavior in Peer-to-Peer markets? Evidence from the carsharing platform BlaBlaCar," Information Economics and Policy, Elsevier, vol. 48(C), pages 15-31.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ormnsc:v:67:y:2021:i:1:p:166-184. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.