New research from Stanford Graduate School of Business indicates that Uber’s system of ratings and performance notifications has led to Chicago drivers matching the safety and reliability standards of local taxi drivers. The study, which analyzed nearly 6.9 million UberX rides in downtown Chicago during early 2017, examined how feedback mechanisms impact driver behavior.
Uber requires its drivers to pass a basic criminal background and driving record check, as well as hold a valid license, registration, and insurance. Unlike taxi drivers in Chicago—who must complete a two-week course and licensing exam—Uber drivers are not subject to extensive pre-employment screening.
The company uses customer ratings on each trip to monitor quality. Drivers who receive low scores are notified and given resources for improvement; those who do not raise their ratings risk being removed from the platform.
“Services marketplaces are an important part of the economy, but they won’t fulfill their potential unless they can ensure quality while allowing the service workers to enter and exit flexibly,” says Susan Athey, PhD ’95, professor of economics at Stanford Graduate School of Business. “Workers are very responsive to information and feedback about their performance.”
The study found that riders gave higher ratings for trips characterized by steady speeds, minimal sudden braking or acceleration, limited cell phone use by the driver, shorter travel times, and pickups or drop-offs close to requested locations. When notified about low ratings, drivers improved these aspects of service significantly after just one warning. Telemetry data showed improvements in speed consistency, route efficiency, phone usage reduction, and more accurate pickups and drop-offs.
“Workers may not know or be paying attention to these dimensions of quality. A driver may not realize that they have more hard brakes than others,” Athey says. “Learning that they are below average has a powerful effect.”
Drivers who were deactivated due to persistently low ratings performed worse than average across key measures observed by researchers.
Athey’s team also tested whether providing detailed feedback would further improve driving behavior. Some drivers received dashboards with granular trip-by-trip data; those in this group showed greater improvement compared with a control group receiving only summary reports.
“A reminder of your past behavior seems to be a good thing in terms of future behavior,” says Juan Camilo Castillo, assistant professor at the University of Pennsylvania.
To compare gig-economy oversight with traditional regulation methods, researchers evaluated UberX drivers against licensed taxi drivers hailed through the Uber Taxi app. While taxis used phones less often and took quicker routes on average, UberX drivers outperformed them on speeding incidents, sudden braking or acceleration events, and convenience factors like pickup location accuracy. Overall service quality was comparable between both groups based on rider priorities.
“The conventional wisdom was that there might be a tradeoff between quality, which might come from experience and training in the case of taxis, and cost, which is generally lower with Uber,” Athey says. “We don’t find evidence that taxi quality is higher.”
Athey suggests these findings could influence regulatory approaches: “We might be moving to a world where occupational licensing and other barriers…can be removed while maintaining service quality,” she says. “This may have fewer safety downsides than ever before.”
This story was originally published by Stanford Graduate School of Business.
