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Occupational Licensing of Uber Drivers

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Abstract

We examine whether occupational licensing improves service quality and safety using trip-level Uber data that include driver ratings and telematics-based measures of driving behavior. Exploiting quasi-random assignment from proximity-based dispatch, we compare trips served by licensed and unlicensed drivers in two settings: a cross-border comparison between New York City and New Jersey, and a deregulation event in Houston. Across settings and specifications, including instrumental variable estimates, we find no consistent evidence that licensing improves consumer outcomes. In Houston, post-deregulation entrants are indistinguishable from previously licensed drivers on ratings and driving behavior, despite differing markedly in experience and age.

Suggested Citation

  • Jonathan Hall & Jason F. Hicks & Morris M. Kleiner & Yun Taek Oh, 2026. "Occupational Licensing of Uber Drivers," Staff Report 687, Federal Reserve Bank of Minneapolis.
    • Handle: RePEc:fip:fedmsr:103697
    DOI: 10.21034/sr.687
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    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • J89 - Labor and Demographic Economics - - Labor Standards - - - Other
    • K29 - Law and Economics - - Regulation and Business Law - - - Other
    • J48 - Labor and Demographic Economics - - Particular Labor Markets - - - Particular Labor Markets; Public Policy
    • J00 - Labor and Demographic Economics - - General - - - General
    • L80 - Industrial Organization - - Industry Studies: Services - - - General
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations

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