he question arises as to what kind of individuals benefitfrom the introduction of ridesharing.Smith(2016) provides some survey evidence on this issue. In 2015, the Pew Research Center surveyed 4,787 adult Americans on issues related to the digital economy. Part of the survey was focused on ridesharing. The survey found three interesting statistics:(i) about 15% of Americans use ridesharing apps, but one-third do not know about these services; (ii)the use of ridesharing platforms is more popular among young adults who live in urban areas who are well educated; and (iii) frequent users of ridesharing services are less likely

7Nosko (2015)12, analysing two case studies, suggest that surge pricing is helpful in keeping expected wait time to within five minutes and may also provide significant economic benefits for drivers. Chen and Sheldon (2015) explore how drivers respond to surge pricing using a discontinuity design. They argue that surge pricing increases the overall number of trips as well as efficiency (see also Cachon et al., 2016).133.2 EquityLittle rigorous research has explored the equity impacts of ridesharing platforms. Equity is not easy to define, but broadly speaking, it relates to the distributional impacts resulting from the introduction of ride-sharing platforms. We look at several issues, including the impact on owners, drivers, and customers.

here is little analysis on how the entry of ridesharing companies affects taxi customers. One notable exception is Wallsten (2015), who examines how Uber’s popularity in markets affects complaints about taxi rides in New York City and Chicago. He defines popularityas the Google Trend search index for searches for "Uber" in each city.He concludes that Uber’s growth, as measured by local search popularity,is associated with a decline in someconsumer complaintsto regulators about taxis, such asthose about air conditioning and heating,and "broken" credit card machines. Wallsten’s study does not measure the impact of the change in complaints on consumer surplus; nor does it claim that Uber actually caused the reduction in complaints, though the author does try to control for other explanatory variables.Still, it is the first statisticalevidence we have seen on the relationship between ride sharing and taxiservice.

They estimate that Uber’s basic ride service (UberX) generated about $2.9 billion in consumer surplus for New York, Chicago, Los Angeles and San Francisco in 2015(in 2015 dollars). Extended to the country as a whole, the authors estimate that consumer surplus gains would be about $6.8 billion. This consumer surplus value is larger than the current annual revenues of Uber worldwide, anddoes not include the benefits

Theimpact on congestiondeserves further study. A significant portion of traffic in some cities, such as San Francisco and Los Angeles, is attributable to drivers searching for parking (Winston, 2013). Ridesharing means that people who use ridesharing instead of driving no longer need to search for these spaces, which could reduce congestion.Furthermore, there may be a reduction in congestion costs associated with taxis finding customers (to the extent that ridesharing substitutes for traditional taxi services).The overall impact on congestion is notclear, however,because more consumers will be making use of these services.Some consumers, for example, may switch from mass transit to ridesharing if they are perceived as substitutes. This shift could actually increase congestion

5emissionsper vehicle mile travelled by an individual.Initial survey results suggest that overall greenhouse gas emissions could decline (Martin and Shaheen, 2011; Li et al, 2016), but much more research is needed on actual consumer behavior to develop conclusive estimates

n addition, ridesharing could contribute to important externalities,such ascongestion and emissions. The impact on overall pollution is an empirical question because there are two countervailing factors. Lowering the cost of transportationis likely to increasevehicle miles travelled, which would increase emissions. However, encouraginghigher capacity utilization rates could reduce

Ridesharing platforms canhave several economic benefits.7These platformsincrease the transportation options available to consumers and businessesand are therefore likely to significantly increase consumer welfare. Lyft andUbergivethe consumer multiple different types of rides to choose from.For example, riderscantypicallyrequest a normal car and ride from a partner driver, carpooling at a cheaper price,a ride in a large car,ora luxury car.8These ridesharing platforms may alsoencourage higher utilization of the existing vehicle stock. One study,performed in five cities, found that Uber drivers had higher capacity utilization rates than taxis, likely due to Uber’s more efficient ordering and pricing methods, its larger scale, as well as inefficiencies of taxi regulation (Cramer and Krueger, 2016).Some cities have allocateddedicated parking spots throughout the city to such ridesharing under the assumption that they may generate social benefits (Shaheen, 2010).

any economic features of ridesharing platforms make them attractiveto buyers and sellers(Einav et al., 2016).

4trust in exchange, which makes use of buyerand seller ratings. They afford sellers (i.e., drivers) flexibility in when they choose to work.6Riders do not spend time paying for a ride because payment is done automatically with a credit cardwhen the ride is over. In addition, many ridesharing platforms have a transparent way of adjusting prices to balance supply and demandand thus promote economic efficiency(Hall and Nosko, 2015)

The nature of the industry is likely to change dramatically in the future with the introduction of autonomous vehicles. Uber recently announced it will launch a fleet of autonomous cars in Pittsburgh this year, with the hope of eventually replacing all human “driver-partners” with self-driving cars

Uber has attracted dramatically increased the number of new “driver-partners” for the basic ridesharing service, from fewer than 1,000 in January 2013 to almost 40,000 new drivers starting in December 2014 (Hall and Krueger, 2015).5Currently, more than half of American adults have heard of ridesharing apps like Uber and Lyft, with 15% actuallyusingthe services (Smith, 2016). In China, Didi facilitates 7 million rides per day (Floyd, 2016)

There is evidence that that employment from offering rides is becoming a more important part of the economy, especially in large metropolitan areas4Furthermore, there is evidence that the use of ridesharing platforms is growing rapidly.

ridesharing platformslike Uber and Lyft take a percentage of the fare for each ride. The may varybetween 0% and 30% of the ride fare, most often around 20%-25%(Huet, 2015).3

hese platforms take advantage of GPS to arrange for the ride and help determine a driver’s best route. They also provide other benefits for riders and drivers, including measures of rider and driver quality to foster trust(Luca, 2016), and an efficient payment system, frequently using a credit card that is entered into the platform’s data base. The platforms also can help balance demand and supply by adjusting prices in real time to accommodate shortfalls in the supply of drivers or surges in demand.

Typically, a customer uses an app on her smartphone to request a ride at a particular timeand place

Ridesharing platforms connect drivers and vehicles with consumers who want ridesat an agreed price.

2Ridesharing is not new.It began during World War II.In 1942, the U.S.government required ridesharing arrangements inworkplaces when no other transportation options were availablein orderto save rubber during the war (Chan and Shaheen, 2012). In the 1970s, theoil crisisand spike in gasoline prices encouraged another period of ride sharing. However, today’s ridesharingrevolution was made possible by the development of GPS, smart phone technology, and electronic payments. In the early 1990s, Kowshik et al. (1993) envisioned a future of ridesharing similar to what exists today that would usebetter matching techniques to provide dynamic ridesharing.

suggest areas for researchincludingthe move toward driverless cars

sharing economy, it often involves attempts to make more efficient use of labor and capital resources through the useof information technology that lowers the costs of matchingbuyer withsellers.

Digital ridesharing platforms, such as Uber and Lyft, are part of a broader suite of disruptive,matching market innovations that constitute what is sometimes referred to as the “sharing economy”

While some of these sharing models might have resulted from a need for frugal spending after the global economic recession of 2008, their success was also driven by a growing environmental consciousness combined with the ubiquity of Internet and associated information and communi-cation technologies which make sharing possible at scale.

Uber allows for real-time, location based ridesharing

Airbnb lets people rent out part or all of their homes for short stays,

“sharing economies” of collaborative consumption(Botsman & Rogers, 2010), where people offer and share underuti-lized resources in creative, new ways.

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