The disruptive effect of ridesourcing services on for-hire vehicle drivers’ income and employment

Abstract

Ridesourcing services provided by Transportation Network Companies (TNCs) such as Uber and Lyft are spreading across the United States and are thriving. As a result of TNCs' expansion, there has been concern that ridesourcing is disrupting the traditional for-hire vehicle market, and those drivers are suffering. Based on 12-year Integrated Public Use Microdata Series (IPUMS) datasets from 2005 to 2016, we investigate how the income, worker classification, and employment status of for-hire vehicle drivers in the United States had changed after Uber entered their local markets. We find that with the entry of Uber, the hourly wage income of for-hire drivers had decreased, the percentage of self-employed drivers had increased, and the likelihood of being employed had increased in “Uber-adopted” metropolitan areas. The results confirm the disruptive effect of ridesourcing services on the for-hire vehicle industry and its labor force in the United States. The analysis for the five largest metropolitan areas provides more detailed evidence of the effect of ridesourcing.