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The Value of Flexible Work: Evidence from Uber Drivers

Author

Listed:
  • M. Keith Chen
  • Judith A. Chevalier
  • Peter E. Rossi
  • Emily Oehlsen

Abstract

Participation in non-traditional work arrangements has increased dramatically over the last decade, including in settings where new technologies lower the transaction costs of providing labor flexibly. One prominent example of flexible work is the ride-sharing company Uber, which allows drivers to provide (or not provide) rides anytime they are willing to accept prevailing wages for providing this service. An Uber-style arrangement offers workers flexibility in both setting a customized work schedule and also adjusting the schedule from week to week, day to day, and hour to hour. Using data on hourly earnings for Uber drivers, we document the ways in which drivers utilize this real-time flexibility and we estimate the driver surplus generated by this flexibility. We estimate how drivers’ reservation wages vary from hour to hour, which allows us to examine the surplus and supply implications of both flexible and traditional work arrangements. Our results indicate that, while the Uber relationship may have other drawbacks, Uber drivers benefit significantly from real-time flexibility, earning more than twice the surplus they would in less flexible arrangements. If required to supply labor inflexibly at prevailing wages, they would also reduce the hours they supply by more than two-thirds.

Suggested Citation

  • M. Keith Chen & Judith A. Chevalier & Peter E. Rossi & Emily Oehlsen, 2017. "The Value of Flexible Work: Evidence from Uber Drivers," NBER Working Papers 23296, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:23296
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    References listed on IDEAS

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    Cited by:

    1. repec:oup:oxford:v:33:y:2017:i:4:p:541-571. is not listed on IDEAS
    2. Scott Duke Kominers & Alexander Teytelboym & Vincent P Crawford, 2017. "An invitation to market design," Oxford Review of Economic Policy, Oxford University Press, vol. 33(4), pages 541-571.
    3. Bäckman, Claes & Hanspal, Tobin, 2018. "The geography of alternative work," SAFE Working Paper Series 207, Research Center SAFE - Sustainable Architecture for Finance in Europe, Goethe University Frankfurt.
    4. Brodeur, Abel & Nield, Kerry, 2016. "Has Uber Made It Easier to Get a Ride in the Rain?," IZA Discussion Papers 9986, Institute for the Study of Labor (IZA).
    5. Anuj Kapoor & Catherine Tucker, 2017. "How do Platform Participants respond to an Unfair Rating? An Analysis of a Ride-Sharing Platform Using a Quasi-Experiment," Working Papers 17-19, NET Institute.
    6. Alexandre Mas & Amanda Pallais, 2017. "Labor Supply and the Value of Non-Work Time: Experimental Estimates from the Field," NBER Working Papers 23906, National Bureau of Economic Research, Inc.
    7. Maier, Michael F. & Viete, Steffen & Ody, Margard, 2017. "Plattformbasierte Erwerbsarbeit: Stand der empirischen Forschung," IZA Research Reports 81, Institute for the Study of Labor (IZA).
    8. Leon S. Moskatel & David J.G. Slusky, 2017. "Did UberX Reduce Ambulance Volume?," WORKING PAPERS SERIES IN THEORETICAL AND APPLIED ECONOMICS 201708, University of Kansas, Department of Economics, revised Oct 2017.

    More about this item

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General

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