Digital Platforms and the Sharing Economy

Abstract

This thesis was motivated by the tremendous growth of the sharing economy platforms. I study several topics on the transportation sector of the sharing economy and their policy implications, using data from the City of Chicago. In the first chapter, I focus on the notion of sharing, which is the essence of the services in the sharing economy. I estimate how sharing affects social behavior by exploring tipping at the extensive and intensive margin, where the extensive margin shows whether the rider tipped or not and the intensive margin represents the tip amount. My empirical results suggest that sharing leads to a decrease in tip likelihood and tip amounts. As tipping is a private action in ridesharing, people tend to free ride, assuming that the other rider will tip on their behalf. In other words, this demonstrates that people are less likely to follow the social norm and feel less guilty not following it, if their actions are not revealed. In my other chapter, I examine the unintended consequences of price regulation in the context of ridesharing and taxi services. Taxis face strict fare regulations and a new congestion pricing policy for ridesharing was implemented to combat congestion. I find that taxi and ridesharing regulations have unintended heterogeneous effects by impacting low-income and minority-concentrated areas more severely. More specifically, the price increase, as well as the decrease in the number of pickups, were only significant for trips that start from Black-and-Hispanic-concentrated and low-income neighborhoods. Although none of this was intended, this can exacerbate the inequality and segregation among neighborhoods rather than solve the status quo.