Should Firms Promote Public Health to their Customers? Evidence of Economic Impact from a Natural Experiment in Ridesharing During the COVID-19 Pandemic

Abstract

Can firms do good and also make money, particularly when the situation desperately demands it? For instance, by late 2021, a fraction of the world’s population had been vaccinated for COVID-19, and an even smaller fraction had received boosters to combat ever-emerging variants. Governments and firms have invested billions of dollars to encourage first-time and repeat vaccination. While research has shown that nudges by health organizations can increase vaccinations, there is limited evidence of how public health nudges by firms affect demand for their services, especially for firms unrelated to the healthcare industry. Furthermore, firms may hesitate to promote public health initiatives if they view them as having an ambiguous effect on their business. Using a natural experiment with a ridesharing platform, we find evidence that nudging customers to do good, i.e., vaccinate, can have a positive impact on firm revenues. Without providing financial incentives, a simple socially-useful public health nudge can generate demand for the platform’s services by providing timely information (e.g., closest vaccine centers) and convenience. Analyzing ~4 million customer trips, we found that the nudge led to a 3.54-7.67% increase in ridesharing usage, generating ~$50,200-$117,700 per week in additional revenues. We conducted analysis of a similar intervention in a very different geography and found consistent results, providing multi-country evidence of our findings. Our results may encourage more firms to experiment with promoting public health to their customers in similar contexts (e.g., flu, future disease outbreaks).

Keywords: Nudge, Ridesharing Platform, Public Health, COVID-19, Natural Experiment, Vaccination, Corporate Social Responsibility