One of the major labor market issues affecting Uber drivers is occupational licensing. About one-quarter of the U.S. workforce must acquire a license from the government in order to work for pay (Bureau of Labor Statistics 2016). In some cities—New York, for example—ride-sharing without a taxi license is illegal. The requirements for licensure in New York City are stringent, and the licensure process takes three months on average, with upfront costs of at least $2,000. In addition, the driver must complete a defensive driving course, pass a medical exam, be subjected to a drug test, undergo fingerprint and background checks, take classes on wheelchair-accessible vehicle training, acquire a commercial vehicle license, and purchase commercial vehicle insurance. These substantial fixed costs result in fewer drivers but much lower turnover rates for Uber drivers in New York than in any other U.S. city where the company operates; they also result in longer working hours. Figure 1 shows driver turnover by city. New York City has lower turnover, and Houston, which has few regulations for drivers, has relatively high turnover of drivers.
Figure 2 shows that the ratio of New York Uber drivers to the population of the city or the metropolitan statistical area is considerably lower than either Chicago or San Francisco, and the base prices are higher. Although traditional medallion taxi drivers can serve as substitutes for Uber drivers in any city, the number of Uber drivers in New York is considerably lower than in Chicago or San Francisco. Also, the base Uber fares in Chicago and San Francisco are lower than those in New York City for both 2015 and 2016.
The number of workers directly working through apps now comprise nearly 1 per- cent of the total workforce, making gig labor markets one of the fastest growing areas in the labor force.
Evidence from a quasi-experiment in New York and New Jersey suggests that there are few gains from occupational licensing of ride-sharing providers as assessed through customer satisfaction or measures of customer safety.
The Digital Economy – Dislocations in labor markets, with old industries and jobs disappearing Don Tapscott says
In the book, I warned that technology might actually destroy more jobs than it was creating. I asked, “How will we manage the transition to new types of work and a new knowledge base for the economy? ”Now, for the first time in modern history, economic growth in OECD countries is not generating a commensurate … Continue reading
Americans experience tremendous income volatility, and that volatility is on the rise. Income volatility matters because it is hard to manage. The typical household faces a shortfall in the nancial bu er necessary to weather this volatility. Moreover, the decline in real wages since 2009 for all income groups except the top 5th percentile means … Continue reading
Independent Workers in US – 9% report using at least one On-Demand economy platform as a source of work or income
The On-Demand Economy has hit the headlines and caught mainstream attention. Often referred to as the sharing economy, this rapidly growing segment includes high-profile players such as Airbnb (lodging), Uber and Lyft (taxi services), Handy (clean- ers), Etsy (crafts), TaskRabbit (general tasks) and many others. Broadly defined, the On-Demand economy refers to economic activity generated … Continue reading
It’s true that, in many ways, sharing-economy jobs can offer more autonomy than traditional employer-employee relationships. But there’s a dark side to these work arrangements that gets considerably less press: the shifting of risk off corporate balance sheets and onto the shoulders of individual Americans, who may not even realize what kinds of liabilities they’re … Continue reading
I love the sharing economy because it’s efficient. Got some spare time? Become a TaskRabbit! Spare space? AirBNB it! A car and nowhere to go? Drive for Uber or Lyft! The taxi industry is a regulatory-capture nightmare. Disrupt ‘em ’til they’re dead? Don’t mind if you do! …And yet our 21st-century sharing-economy dream is beginning … Continue reading