Who took gig jobs during the COVID-19 recession? Evidence from Uber Eats in Japan

Abstract

The main purpose of this study is to examine gig workers in transportation sectors, especially focusing on workers in food delivery services, who had increased during the COVID-19 recession. By using a unique survey of 188 Uber Eats delivery persons in Japan conducted from October 2020 to January 2021, we analyze the features and labor supply behavior of the delivery persons who took the jobs during the COVID-19 recession. We found that more job losers, lower income earners and more manual workers, who are considered to be more negatively impacted by the pandemic, entered the food delivery service market during the recession. We also found that at least one-third of delivery persons worked at an hourly wage below the minimum wage, and those workers were highly concentrated in the workers who joined the market after the pandemic became severe. Based on the theory of compensating wage differentials, our analysis using hypothetical questions also found that such workers are more willing to accept jobs at lower hourly wages than those who started working at Uber Eats before COVID-19 was recognized, even under poor working conditions, such as downpours or fatigue. Our findings suggest that the gig economy, such as food delivery services, acts as an outlet for low-income and unemployed persons during recessions, indicating that such work may serve as a buffer to smooth income against business cycles. However, ample labor suppliers who are eager to take jobs with less money may exert additional downward pressure on wages during recessions.