Drivers of Supplier Participation in Ride-Hailing Platforms

Abstract

Ride-hailing platforms such as Uber offer service suppliers more flexible work conditions but lower security than permanent jobs. This study examines the preferences of ride-hailing drivers when they are offered contract and platform design options related to flexibility, financial security, and information features. The sample design and the discrete choice experiment approach we use permit the exploration of differences in the preferences of sub-groups of suppliers, including active and inactive drivers, drivers with and without other jobs, and those who multi-home. We find that the utility and willingness of drivers to work for ride-hailing platforms generally increase when the ride-hailing company provides a minimum wage guarantee, a company-sponsored benefit plan, and information features that protect drivers’ privacy and allow them to screen for undesired passengers. These attributes are important enough for drivers so that they are willing to sacrifice scheduling flexibility by committing to minimum working hours in exchange for those attributes. We identified significant heterogeneity in driver preferences. For drivers with a primary job or jobs other than ride-hailing, the perception of working conditions in the primary job affects their willingness to restart ride-hailing services. Preferences also vary depending on whether a driver participates in one or more platforms. These results suggest that offering a menu of contract options could provide novel tools for ride-hailing companies to improve the stability and predictability of supply. It may also alleviate some of the concerns about driver working conditions that have led to increasing calls for the regulation of ride-hailing services to protect drivers.