Algorithm Aversion: Evidence from Ridesharing Drivers

36 Pages Posted: 30 Aug 2022 Last revised: 19 Jun 2023

See all articles by Meng Liu

Meng Liu

Washington University in St. Louis

Xiaocheng Tang

Meta Platforms Inc

Siyuan Xia

Shanghai Jiaotong University

Shuo Zhang

Shanghai Jiao Tong University (SJTU) - Shanghai Jiao Tong University, Antai College of Economics and Management

Yuting Zhu

National University of Singapore

Qianying Meng

affiliation not provided to SSRN

Date Written: August 19, 2022

Abstract

AI algorithms often cannot realize their intended efficiency gains because of their low adoption by human users. Leveraging an algorithmic recommendation rollout on a large ridesharing platform, we identify contextual experience and herding as two important factors that explain ridesharing drivers’ aversion to an algorithm that conducts system-wide optimization and is designed to help drivers make better location choices. Specifically, we find that drivers are less likely to follow the algorithm when the algorithmic recommendation does not align with their past experience at a given location-time unit, and when their peers’ actions contradict the algorithmic recommendations. We discuss the managerial implications of these findings.

Keywords: Algorithm Aversion, AI Algorithms, Contextual Experience, Herding, Ridesharing

Suggested Citation

Liu, Meng and Tang, Xiaocheng and Xia, Siyuan and Zhang, Shuo and Zhu, Yuting and Meng, Qianying, Algorithm Aversion: Evidence from Ridesharing Drivers (August 19, 2022). Available at SSRN: https://ssrn.com/abstract=4194660 or http://dx.doi.org/10.2139/ssrn.4194660

Meng Liu

Washington University in St. Louis ( email )

Xiaocheng Tang

Meta Platforms Inc

Siyuan Xia

Shanghai Jiaotong University

Shuo Zhang

Shanghai Jiao Tong University (SJTU) - Shanghai Jiao Tong University, Antai College of Economics and Management ( email )

1954 Huashan Road
Shanghai, Shanghai 200030
China

Yuting Zhu (Contact Author)

National University of Singapore ( email )

15 Kent Ridge Dr
BIZ 1 8-14
Singapore, 119245

Qianying Meng

affiliation not provided to SSRN

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