COVID-19 and Digital Resilience: Evidence from Uber Eats

51 Pages Posted: 16 Jun 2020 Last revised: 20 Jan 2023

See all articles by Manav Raj

Manav Raj

University of Pennsylvania - Management Department

Arun Sundararajan

NYU Stern School of Business; New York University (NYU) - Center for Data Science

Calum You

Uber Technologies Inc.

Date Written: January 18, 2023

Abstract

Using order-level data from Uber Technologies, we study how the COVID-19 pandemic and the ensuing shutdown of businesses in the United States in 2020 affected small business restaurant supply and demand on the Uber Eats platform. We find evidence that small restaurants experience significant increases in activity on the platform following the closure of the dine-in channel. We document how locality- and restaurant-specific characteristics moderate the size of the increase in activity through the digital channel and explain how these increases may be due to both demand- and supply-side shock. We observe an increase in the intensity of competitive effects following the economic shock and show that growth in the number of providers on a platform induces both market expansion and heightened inter-provider competition. Higher platform activity in response to the shock does not only have short-run implications: restaurants with larger demand shocks had a higher on-platform survival rate one year after the lockdown, suggesting that the platform channel contributes towards long-run resilience following a crisis. Our findings document the heterogeneous effects of platforms during the pandemic, underscore the critical role that digital technologies play in enabling business resilience in the economy, and provide insight into how platforms can manage competing incentives when balancing market expansion and growth goals with the competitive interests of their incumbent providers.

Keywords: COVID, coronavirus, platform, sharing economy, crisis, Uber, competition, disruption

JEL Classification: L1, L83, L86, D43, O38

Suggested Citation

Raj, Manav and Sundararajan, Arun and You, Calum, COVID-19 and Digital Resilience: Evidence from Uber Eats (January 18, 2023). Available at SSRN: https://ssrn.com/abstract=3625638 or http://dx.doi.org/10.2139/ssrn.3625638

Manav Raj

University of Pennsylvania - Management Department ( email )

The Wharton School
Philadelphia, PA 19104-6370
United States

Arun Sundararajan (Contact Author)

NYU Stern School of Business ( email )

44 West 4th Street, KMC 8-90
New York, NY 10012
United States

HOME PAGE: http://digitalarun.ai/

New York University (NYU) - Center for Data Science ( email )

726 Broadway
7th Floor
New York, NY 10003
United States

Calum You

Uber Technologies Inc. ( email )

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

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