UCL School of Management Assistant Professors Yiting Deng, Wei Miao and Yongdong Liu have recently published a paper in the Journal of Operations Management investigating the effects of surge pricing on driver behaviour in the ride-sharing market. One of the leading journals in the ISI Operations Research and Management Science, the Journal of Operations Management publishes research that has both academic and practical relevance to the current issues facing the world.
Entitled “The Effects of Surge Pricing on Driver Behavior in the Ride-Sharing Market: Evidence from a Quasi-Experiment”, the research paper examines how surge pricing causally affects driver earnings and labour supply through the implementation of a unique quasi-experiment that saw a leading ride-sharing company in China introduce surge pricing in two cities at different times.
Analysing the work hours and incomes of drivers in these two cities, the findings suggest that the benefit of surge pricing was unevenly distributed across drivers, and ultimately provided more benefit to drivers working part-time, many of whom had the ability to increase the number of days they worked to earn more. Full-time drivers, on the other hand, had less flexibility and earned less, on average, than drivers in cities without surge pricing.
The research paper, which was written in collaboration with Associate Professor Wei Wang from the University of International Business and Economics and UCLA Professor Christopher S. Tang, also recently featured in the UCLA Anderson Review. Providing an accessible and in-depth breakdown of the paper’s findings, the article discusses the research and what these numbers ultimately mean for the ride-sharing industry.
