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Gig-labor: Trading safety nets for steering wheels

This paper shows that the introduction of the “gig-economy” changes the way employees respond to job loss. Using a comprehensive set of Uber product launch dates and employee-level data on job separations, we show that laid-off employees with access to Uber are less likely to apply for UI benefits, rely less on household debt, and experience fewer delinquencies. Our empirical strategy is based on a triple difference-in-difference empirical model, comparing the difference in outcome variables 1) pre- and post-layoff, 2) before and after Uber enters a market, and 3) between workers with and without the ability to participate on the ride-sharing platform (car-owners inferred from auto credit histories). In support of our identification strategy, we find no apparent pre-existing difference in outcomes in the months leading up to Uber’s entry into a market. Moreover, the effects are severely attenuated for workers with an auto lease, for whom the viability of participating on the ride-sharing platform is significantly reduced. Overall, our findings show that the introduction Uber had a profound effect on labor markets.