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An empirical analysis of taxi, Lyft and Uber rides: Evidence from weather shocks in NYC

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  • Brodeur, Abel
  • Nield, Kerry

Abstract

Using all taxi, Lyft and Uber rides in New York City, we show that the number of Uber and Lyft rides is significantly correlated with whether it rained. The number of Uber (Lyft) rides per hour is about 22 (19)% higher when it is raining, while the number of taxi rides per hour increases by only 5% in rainy hours-suggesting that surge pricing (prime time) encourages an increase in supply. We show that while the number of taxi rides, passengers and fare income all significantly decreased after Uber entered the market in May 2011, taxis do not respond differently to increased demand in rainy hours than non-rainy hours since the entrance of Uber. Last, we test whether Lyft’s entry in the market affected Uber. Our estimates suggest that Uber was still growing after Lyft entered the market, but that Uber rides during rainy hours decreased by about 9%. Our findings suggest that dynamic pricing make Lyft and Uber drivers compete for rides when demand suddenly increases, i.e., during rainy hours.

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  • Brodeur, Abel & Nield, Kerry, 2018. "An empirical analysis of taxi, Lyft and Uber rides: Evidence from weather shocks in NYC," Journal of Economic Behavior & Organization, Elsevier, vol. 152(C), pages 1-16.
    • Handle: RePEc:eee:jeborg:v:152:y:2018:i:c:p:1-16
    DOI: 10.1016/j.jebo.2018.06.004
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    17. Guilherme Mendes Resende & Ricardo Carvalho de Andrade Lima, 2018. "Working Paper No. 001/2018 - Competition Effects of the Sharing Economy in Brazil: Has Uber's entry affected the cab-hailing app market from 2014 to 2016?," Documentos de Trabalho 2018011, Conselho Administrativo de Defesa Econômica (Cade), Departamento de Estudos Econômicos.
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    More about this item

    Keywords

    Rain; Taxi; Uber; Lyft; Dynamic pricing;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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