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Leaving Money on the Dashboard: Price Dispersion and Search Frictions on Uber and Lyft

Author

Listed:
  • Jeffrey Fossett
  • Michael Luca
  • Yejia Xu

Abstract

We document price differences for identical trips on Uber and Lyft, based on an audit of the two platforms. While price dispersion exists in the market, device-level data show that only 16.1 percent of consumers opening one app also open the other. Our estimates suggest that the modest frictions involved in comparison shopping increase platforms’ gross booking volume by over $300 million annually in New York City alone. While price-comparison engines could in principle reduce frictions, Uber’s API terms of use limit such services, reducing riders’ ability to price compare.

Suggested Citation

  • Jeffrey Fossett & Michael Luca & Yejia Xu, 2025. "Leaving Money on the Dashboard: Price Dispersion and Search Frictions on Uber and Lyft," NBER Working Papers 34441, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:34441
    Note: IO LS PE PR
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    More about this item

    JEL classification:

    • D0 - Microeconomics - - General
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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