Minimum Earnings Regulation and the Stability of Marketplaces

11/19/20 | 4:15pm | Online only


 

 

 

 

Garrett Van Ryzin

Distinguished Scientist
Amazon


Abstract: We build a model to study the implications of  utilization-based minimum earning regulations of the kind enacted by New York City (and recently Seattle) for its ride-hailing providers. We identify the precise conditions under which a utilization-based minimum earnings rule causes marketplace instability, where stability is defined as the ability of platforms to keep wages bounded while maintaining the current flexible (free-entry) work model. We also calibrate our model using publicly available data, showing the limited power of the law to increase earnings within an open marketplace. We argue that affected ride-hailing companies might respond to the law by reducing driver flexibility.

This is joint work with Arash Asadpour and Ilan Lobel.

Bio: Garrett van Ryzin is a Distinguished Scientist at Amazon in the Supply Chain Optimization Technologies (SCOT) group. Before joining Amazon, he was a Distinguished Scientist and Head of Marketplace Lab at Lyft, working on pricing and market design. Prior to Lyft, Garrett was Head of Marketplace Optimization Advanced Development  at Uber. Garrett was also a Professor of Decision Risk and Operations at Columbia University and subsequently Professor of Operations, Technology and Information Management at Cornell Tech. Garrett received a bachelor’s degree in Electrical Engineering  from Columbia University, and holds a master’s degree in Electrical Engineering and Computer Science  and Ph.D. in Operations Research from MIT.

Event Time: 

2020 - 16:15