Document Type
Discussion Paper
Publication Date
1-1-2020
CFDP Number
2219
CFDP Pages
70
Journal of Economic Literature (JEL) Code(s)
L13, R41, D62
Abstract
This paper develops a strategy with simple implementation and limited data requirements to identify spatial distortion of supply from demand -or, equivalently, unequal access to supply among regions- in transportation markets. We apply our method to ride-level, multi-platform data from New York City (NYC) and show that for smaller rideshare platforms, supply tends to be disproportionately concentrated in more densely populated areas. We also develop a theoretical model to argue that a smaller platform size, all else being equal, distorts the supply of drivers toward more densely populated areas due to network effects. Motivated by this, we estimate a minimum required platform size to avoid geographical supply distortions, which informs the current policy debate in NYC around whether ridesharing platforms should be downsized. We nd the minimum required size to be approximately 3.5M rides/month for NYC, implying that downsizing Lyft or Via-but not Uber{can increase geographical inequity.
Recommended Citation
Ghili, Soheil and Kumar, Vineet, "Spatial Distribution of Supply and the Role of Market Thickness: Theory and Evidence from Ride Sharing" (2020). Cowles Foundation Discussion Papers. 28.
https://elischolar.library.yale.edu/cowles-discussion-paper-series/28