The labor market impacts of ridesharing on American Cities

Tucker Omberg. From the journal Labour Economics. Excerpts:

"Highlights

• A city’s unemployment rate falls once the ridesharing app Uber begins operating.
• This is likely driven by workers driving for Uber while frictionally unemployed.
• Uber may also allow unemployed workers to commute to new job opportunities.
• 25th percentile Wages also increase following Uber’s arrival to a city.
• The “gig economy” is complementary to more traditional employment.

Abstract

This paper examines the impact of the emergence of the “gig economy” on the broader labor market by exploiting the staggered introduction of the ridesharing service Uber to American Cities between 2013 and 2018. Using difference-in-differences methods, Callaway and Sant’Anna’s doubly robust difference-in-differences estimator, Chaisemartin and D’Haultoeuille’s time-corrected Wald estimator, and Abadie et al’s synthetic control method, I estimate that Uber’s arrival to a city resulted in decline in the unemployment rate by between a fifth and a half of a percentage point. This suggests that Uber allowed many workers to supplement their earnings during periods of unemployment, framing the ridesharing service as a complement to, rather than a substitute for, traditional employment. I also find some evidence that Uber had a very small positive effect on wages at the lower end of the wage distribution, suggesting that Uber may have altered worker search behavior or affected bargaining power."