We find that when Uber raises the base fare in a city, ... there is no detectable difference in the average hourly earnings rate compared to before the fare increase. With a higher fare, drivers earn more when driving passengers, and so how do drivers make the same amount per hour? The main reason is that driver utilization falls; drivers spend a smaller fraction of their working hours on trips with paying passengers when fares are higher.HT: MarginalRevolution.com
Friday, November 17, 2017
What happens if Uber raises driver wages?
ANSWER: Nothing, because driver supply increases which reduces the time spent driving for each driver.