Service Quality on Online Platforms: Empirical Evidence about Driving Quality at Uber

59 Pages Posted: 28 Dec 2019 Last revised: 16 Sep 2021

See all articles by Susan Athey

Susan Athey

Stanford University

Juan Camilo Castillo

University of Pennsylvania - Department of Economics

Bharat Chandar

Stanford Graduate School of Business

Date Written: September 15, 2021

Abstract

Online marketplaces have adopted new mechanisms for quality control that can accommodate a flexible pool of providers, with unclear effects on overall service quality. We focus on ride-hailing: pre-screening, which prevailed in taxi markets, has been diminished in favor of automated quality measurement, incentives, and nudges. Using telemetry data, an objective measure of quality, we show that UberX drivers perform better than UberTaxi drivers. We then explore whether the difference is driven by incentives, nudges, and information. Drivers respond to user preferences and to nudges, such as notifications due to low ratings. Informing drivers about their past behavior improves quality, especially for low-performing drivers.

Keywords: Online Platforms, Ride Hailing, Reputation Systems, Nudges, Driving Quality, Telemetry Data

JEL Classification: D83, O33, L91

Suggested Citation

Athey, Susan and Castillo, Juan Camilo and Chandar, Bharat, Service Quality on Online Platforms: Empirical Evidence about Driving Quality at Uber (September 15, 2021). Available at SSRN: https://ssrn.com/abstract=3499781 or http://dx.doi.org/10.2139/ssrn.3499781

Susan Athey

Stanford University ( email )

Stanford, CA 94305
United States

Juan Camilo Castillo (Contact Author)

University of Pennsylvania - Department of Economics ( email )

Ronald O. Perelman Center for Political Science
133 South 36th Street
Philadelphia, PA 19104-6297
United States

HOME PAGE: http://www.jc-castillo.net

Bharat Chandar

Stanford Graduate School of Business ( email )

Stanford, CA
United States

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