The Impact of COVID-19 on the Ride-Sharing Industry and Its Recovery: Causal Evidence from China
Wang, Wei, Wei Miao, Yongdong Liu, Yiting Deng, and Yunfei Cao. 2022. Transportation Research Part A: Policy and Practice 155 (January): 128–41.
Abstract
The COVID-19 pandemic has brought unprecedented disruptions to many industries, and transportation is among the most disrupted. We seek to address, in the context of a ride-sharing platform, drivers’ responses to the pandemic and the post-pandemic recovery. We collected comprehensive trip data from one of the leading ride-sharing companies in China from September 2019 to August 2020, covering pre-, during-, and post-pandemic phases in three major Chinese cities, and investigated the causal effect of the COVID-19 pandemic on driver behavior. We find that drivers only slightly reduced their shift decisions in response to increased COVID-19 cases, likely because they had to make a living by providing ride-sharing services. Nevertheless, conditional on working, drivers exhibit strong risk aversion: As the number of new cases increases, drivers strategically adjust the scope of their search for passengers, complete fewer trips, and, as a result, earn less per day. Finally, our heterogeneity analyses indicate that the effects appear to vary both across drivers and over time, with generally stronger effects on drivers who are older, more experienced, more active before the pandemic, and of higher status within the firm. Our findings have strong policy implications: These drivers tend to contribute more to the focal company and rely more on providing ride-sharing services to make a living. Therefore, they should be prioritized in stimulus plans offered by the government or the ride-sharing company.