The Value of Flexible Work: Evidence from Uber Drivers

48 Pages Posted: 5 Apr 2017

See all articles by M. Keith Chen

M. Keith Chen

University of California, Los Angeles (UCLA) - Anderson School of Management

Judith A. Chevalier

Yale School of Management; National Bureau of Economic Research (NBER)

Peter Rossi

University of California, Los Angeles (UCLA) - Anderson School of Management

Emily Oehlsen

Uber Technologies Inc.

Multiple version iconThere are 2 versions of this paper

Date Written: March 2017

Abstract

Participation in non-traditional work arrangements has increased dramatically over the last decade, including in settings where new technologies lower the transaction costs of providing labor flexibly. One prominent example of flexible work is the ride-sharing company Uber, which allows drivers to provide (or not provide) rides anytime they are willing to accept prevailing wages for providing this service. An Uber-style arrangement offers workers flexibility in both setting a customized work schedule and also adjusting the schedule from week to week, day to day, and hour to hour. Using data on hourly earnings for Uber drivers, we document the ways in which drivers utilize this real-time flexibility and we estimate the driver surplus generated by this flexibility. We estimate how drivers’ reservation wages vary from hour to hour, which allows us to examine the surplus and supply implications of both flexible and traditional work arrangements. Our results indicate that, while the Uber relationship may have other drawbacks, Uber drivers benefit significantly from real-time flexibility, earning more than twice the surplus they would in less flexible arrangements. If required to supply labor inflexibly at prevailing wages, they would also reduce the hours they supply by more than two-thirds.

Suggested Citation

Chen, Keith and Chevalier, Judith A. and Rossi, Peter and Oehlsen, Emily, The Value of Flexible Work: Evidence from Uber Drivers (March 2017). NBER Working Paper No. w23296. Available at SSRN: https://ssrn.com/abstract=2946702

Keith Chen (Contact Author)

University of California, Los Angeles (UCLA) - Anderson School of Management ( email )

110 Westwood Plaza
Los Angeles, CA 90095-1481
United States

HOME PAGE: http://www.anderson.ucla.edu/faculty/keith.chen/index.html

Judith A. Chevalier

Yale School of Management ( email )

135 Prospect Street
P.O. Box 208200
New Haven, CT 06520-8200
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Peter Rossi

University of California, Los Angeles (UCLA) - Anderson School of Management ( email )

110 Westwood Plaza
Los Angeles, CA 90095-1481
United States

Emily Oehlsen

Uber Technologies Inc. ( email )

1455 Market St
San Francisco, CA 94103-1331
United States

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