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Mobile Hailing Technology and Taxi Driving Behaviors

Author

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  • Yanwen Wang

    (UBC Sauder School of Business, University of British Columbia, Vancouver, British Columbia V6T 1Z2, Canada)

  • Chunhua Wu

    (UBC Sauder School of Business, University of British Columbia, Vancouver, British Columbia V6T 1Z2, Canada)

  • Ting Zhu

    (Krannert School of Management, Purdue University, West Lafayette, Indiana 47907)

Abstract

This paper investigates the impact of mobile hailing technology on taxi driving behaviors. A controversial feature of mobile hailing applications in China is the disclosure of not only pickup locations but also drop-off destinations before drivers accept offers. It provides taxi drivers two different mechanisms to improve their hourly earnings: reducing cruising time and selecting more profitable trips. We examine 3.6-terabyte minute-by-minute geolocation data of 2,106 single-shift drivers in Beijing. A modified change-point model is proposed to infer the adoption decisions and estimate the changes in driving behaviors. We show that mobile hailing technology adoption is associated with an average increase of 6.8% in hourly earnings, equivalent to an extra CNY 750 monthly income. A typical taxi driver greatly improves hourly earnings through trip selection in favor of longer trips rather than aiming for cruising-time reduction. We find that the relative importance of cruising-time reduction and trip selection depends on driver skills and market conditions. We do not find market expansions on the number of trips or working hours, but rather a redistribution of realized trips toward long distances.

Suggested Citation

  • Yanwen Wang & Chunhua Wu & Ting Zhu, 2019. "Mobile Hailing Technology and Taxi Driving Behaviors," Marketing Science, INFORMS, vol. 38(5), pages 734-755, September.
    • Handle: RePEc:inm:ormksc:v:38:y:2019:i:5:p:734-755
    DOI: 10.1287/mksc.2019.1187
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    9. Selcuk, Cemil & Gokpinar, Bilal, 2022. "Incentivizing flexible workers in the gig economy: The case of ride-hailing," Cardiff Economics Working Papers E2022/11, Cardiff University, Cardiff Business School, Economics Section.
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