Driving the Gig Economy
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Abstract
The prototypical gig worker—a contract driver for a ridesharing company—reports self-employment earnings in the Taxi and Limousine Services industry. Growth in the number of self-employed drivers in this industry has dramatically outpaced the growth in solo self-employment in any other industry. We use rich administrative tax data to explore who these workers are, how that has changed over time and how the new drivers combine self-employment with wage and salary work. Uber’s entrance to a local labor market leads to significant growth in the number of drivers over the following years. Other than in New York City, where rideshare drivers are required to meet relatively stringent licensing requirements, increases in the number of drivers following Uber entry has been larger in jurisdictions where regulation had limited the number of taxis. The effect of Uber entry on the probability of becoming a self-employed driver is larger for people who have experienced job displacement. Uber entry increases the exit rate of incumbent taxi drivers and reduces their earnings from driving, though the adverse effects on incumbent drivers’ total earnings are substantially smaller. Labor Labor meetings, Enterprise Data and American Economic meetings on earlier We Nathalie for research assistance. All results have