Ridesharing and Digital Resilience for Urban Anomalies: Evidence from the New York City Taxi Market

Urban anomalies bring uncertainties to society, urban transportation systems, and businesses. Some urban anomalies, such as no-notice and/or unpredictable terrorist attacks or other urban strikes, if not handled in timely ways may result in loss of life or property and pose tremendous risks to public safety overall. Previous studies have focused on developing emergency-management technology but without in-depth analysis exploring how technology-mediated digital systems perform in reality. Besides, the recent literature has demonstrated significant interest in analyzing and comparing the traditional on-demand service (i.e., taxies) and ridesharing platforms (e.g., Uber). The majority of prior studies have focused on their complementary roles in determining environmental conditions. Little is known, however, regarding how and why the two types of platforms perform in contexts of uncertainty (e.g., under emergency situations). This paper aims to bridge this literature gap. Specifically, we consider different types of unexpected urban anomalies (including terrorist attacks, car crashes, and subway shutdowns) and collect large-scale trip data on taxi and ridesharing services. Empirically, we employ a difference in-differences econometric model to compare the platform-level performances (measured by the number of fulfilled trips) of a traditional taxi system and a ridesharing platform after urban anomaly shocks. We observe that the ridesharing platform significantly outperforms the traditional taxi platform in coping with the uncertainties brought about by unexpected anomalies. We conduct a set of robustness checks to verify our findings and propose multiple possibilities to explain them. We conclude, conservatively, that the technological effect and the technology-enabled supply elasticity of the digital platforms are the main factors determining the differences between the platforms during an urban anomaly. This work offers important insights into the design of platform strategies, especially for the stimulation of the labor supply and incentivization of the adoption and use of technology in urban transportation systems in response to anomalous urban upheavals.