Wednesday, June 7th, 2017 3:05 pm

Ride Sharing

Question A: Consumers will be better off, on balance, if European cities treat firms that provide ride-sharing platforms (such as Uber) as substantively different from taxi firms, and thus not necessarily warranting the same regulation.

Responses
 

Source: European IGM Economic Experts Panel
www.igmchicago.org/european-economic-experts-panel

Responses weighted by each expert's confidence

Source: European IGM Economic Experts Panel
www.igmchicago.org/european-economic-experts-panel

Question B: Assuming that taxi and ride-sharing companies were treated as substantively similar — including requirements that they operate on an equal footing regarding safety, insurance and taxation — letting ride-sharing services compete without restrictions on prices or routes would raise consumer welfare.

Responses
 

Source: European IGM Economic Experts Panel
www.igmchicago.org/european-economic-experts-panel

Responses weighted by each expert's confidence

Source: European IGM Economic Experts Panel
www.igmchicago.org/european-economic-experts-panel

Question C: Regardless of how ride-sharing services are treated, existing regulations for traditional taxi firms in many European cities harm consumers by limiting competition.

Responses
 

Source: European IGM Economic Experts Panel
www.igmchicago.org/european-economic-experts-panel

Responses weighted by each expert's confidence

Source: European IGM Economic Experts Panel
www.igmchicago.org/european-economic-experts-panel

Question A Participant Responses

Participant University Vote Confidence Comment Bio/Vote History
Aghion Philippe Aghion Harvard Did Not Answer
Bio/Vote History
         
Allen Franklin Allen Imperial College London Agree 5
Uber provides a different kind of service to regular taxi services that helps consumers. Leck of worker's rights may be a problem though.
Bio/Vote History
         
Antras Pol Antras Harvard Uncertain 6
It depends on what is meant by regulation. Ride-sharing platforms ought to be regulated, but some of current taxi regulations are harmful
Bio/Vote History
         
Baldwin Richard Baldwin The Graduate Institute Geneva Did Not Answer
Bio/Vote History
         
Besley Timothy J. Besley LSE Uncertain 5
Bio/Vote History
         
Blanchard Olivier Blanchard Peterson Institute Agree 8
Bio/Vote History
         
Bloom Nicholas Bloom Stanford Strongly Agree 9
Uber offers more choice - consumers always benefit from choice. The fact so many choose Uber means it is a better service for so many.
Bio/Vote History
         
Blundell Richard William Blundell University College London Did Not Answer
Bio/Vote History
         
Bénassy-Quéré Agnès Bénassy-Quéré Paris School of Economics Disagree 6
Taxi regulation could be adjusted to the new business model; a level playing field is needed.
Bio/Vote History
         
Carletti Elena Carletti Bocconi Uncertain 4
Bio/Vote History
         
Danthine Jean-Pierre Danthine Paris School of Economics Uncertain 3
I cannot answer the question before assessing the justification and efficiency of existing regulation.
Bio/Vote History
         
De Grauwe Paul De Grauwe LSE Did Not Answer
Bio/Vote History
         
Eeckhout Jan Eeckhout University College London Agree 9
The main improvement is to do away with the license system that causes barriers to entry. Should comply with safety, insurance and taxation.
Bio/Vote History
         
Fehr Ernst Fehr Universität Zurich Agree 10
Barriers for entering the taxi market and collusion among taxi companies generate substantial rents in this market
Bio/Vote History
         
Freixas Xavier Freixas Universitat Pompeu Fabra Agree 5
An excessively different regulation will unnecessarily reduce competition between two substitute services.
Bio/Vote History
         
Fuchs-Schündeln Nicola Fuchs-Schündeln Goethe-Universität Frankfurt Did Not Answer
Bio/Vote History
         
Galí Jordi Galí Universitat Pompeu Fabra Agree 6
Bio/Vote History
         
Garicano Luis Garicano LSE Did Not Answer
Bio/Vote History
         
Giavazzi Francesco Giavazzi Bocconi Strongly Agree 5
I agree but existing owners of taxi licencesnshouldb be compensated on a scale depending on the lucence age
Bio/Vote History
         
Griffith Rachel Griffith University of Manchester Agree 6
Most customers will face lower prices. Where drivers make big investments (e.g. London) quality might decline meaning some consumers lose.
Bio/Vote History
         
Guerrieri Veronica Guerrieri Chicago Booth Uncertain 5
Bio/Vote History
         
Guiso Luigi Guiso Einaudi Institute for Economics and Finance Strongly Agree 7
Bio/Vote History
         
Hellwig Martin Hellwig Max Planck Institute for Research on Collective Goods No Opinion
The meaning of "same" and "different" is unclear. There are similarities as well as differences. How releveant are they?
Bio/Vote History
         
Honohan Patrick Honohan Trinity College Dublin Disagree 2
Not sure that differential regulation good; there is scope for improvement in taxi regulation though.
Bio/Vote History
         
Kleven Henrik Kleven Princeton Uncertain 5
Bio/Vote History
         
Krahnen Jan Pieter Krahnen Goethe University Frankfurt Disagree 6
Exempting ride sharing services from existing regulations would put taxi firms at an imposed disadvantage, undermining efficiency.
Bio/Vote History
         
Krusell Per Krusell Stockholm University Strongly Agree 9
Bio/Vote History
         
Kőszegi Botond Kőszegi Central European University Disagree 6
Bio/Vote History
         
La Ferrara Eliana La Ferrara Bocconi Uncertain 5
Bio/Vote History
         
Leuz Christian Leuz Chicago Booth Disagree 7
Uber is more than info society service as it sets price&driver pay, so treating as transport w/minimum quality reg makes sense.
Bio/Vote History
         
Meghir Costas Meghir Yale Uncertain 4
The term regulation is vague. If by regulation we mean ensuring driver qualifications and car safety, these have to have a unified standard
Bio/Vote History
         
Neary Peter Neary Oxford Uncertain 3
Taxis are excessively regulated in many cities, so increased competition is desirable. But regulation also has a role in protecting consumer
Bio/Vote History
         
O'Rourke Kevin O'Rourke Oxford Did Not Answer
Bio/Vote History
         
Pagano Marco Pagano Università di Napoli Federico II Uncertain 1
Bio/Vote History
         
Pastor Lubos Pastor Chicago Booth Uncertain 3
Bio/Vote History
         
Persson Torsten Persson Stockholm University Did Not Answer
Bio/Vote History
         
Pissarides Christopher Pissarides LSE Agree 1
In many European countries taxi services are over-regulated and too expansive
Bio/Vote History
         
Portes Richard Portes London Business School Agree 8
Not the same regulation-->different products. Uber and London black cab qualitatively different. Black cabs also rightly get privileges.
Bio/Vote History
         
Prendergast Canice Prendergast Chicago Booth Agree 8
Bio/Vote History
         
Reichlin Lucrezia Reichlin London Business School Disagree 5
Bio/Vote History
         
Repullo Rafael Repullo CEMFI Agree 8
Given the arrival of new technologies it would make sense to think about the design the whole transport system starting from scratch.
Bio/Vote History
         
Rey Hélène Rey London Business School Agree 6
Bio/Vote History
         
Schoar Antoinette Schoar MIT Agree 7
Bio/Vote History
         
Van Reenen John Van Reenen MIT Agree 5
Bio/Vote History
         
Vickers John Vickers Oxford Agree 7
New technology changes the nature and extent of market failure. (De)regulation should reflect that.
Bio/Vote History
         
Voth Hans-Joachim Voth University of Zurich Uncertain 7
Uber etc are monopolization plays; where taxi regulation works today, as in most European cities, the long-run impact may be negative
Bio/Vote History
         
Weder di Mauro Beatrice Weder di Mauro Gutenberg University Mainz and INSEAD Did Not Answer
Bio/Vote History
         
Whelan Karl Whelan University College Dublin Disagree 8
The business of these firms is not substantively different from taxis, so I don't see why they should be treated differently.
Bio/Vote History
         
Wyplosz Charles Wyplosz The Graduate Institute Geneva Disagree 3
Bio/Vote History
         
Zilibotti Fabrizio Zilibotti Universität Zurich Uncertain 5
Question is ambiguous. Regulation should be relaxed but the same for all operators.
Bio/Vote History
         

Question B Participant Responses

Participant University Vote Confidence Comment Bio/Vote History
Aghion Philippe Aghion Harvard Did Not Answer
Bio/Vote History
         
Allen Franklin Allen Imperial College London Agree 5
This seems an area where competition would be beneficial.
Bio/Vote History
         
Antras Pol Antras Harvard Strongly Agree 10
A positive effect on consumer surplus seems clear; on the producer side, there are winners and losers
Bio/Vote History
         
Baldwin Richard Baldwin The Graduate Institute Geneva Did Not Answer
Bio/Vote History
         
Besley Timothy J. Besley LSE Strongly Agree 10
Bio/Vote History
         
Blanchard Olivier Blanchard Peterson Institute Agree 8
Bio/Vote History
         
Bloom Nicholas Bloom Stanford Strongly Agree 10
Competition is always good for consumers, so they clearly gain. Taxi companies of course hate it - nobody likes having to compete!
Bio/Vote History
         
Blundell Richard William Blundell University College London Did Not Answer
Bio/Vote History
         
Bénassy-Quéré Agnès Bénassy-Quéré Paris School of Economics Disagree 6
Ride-sharing platforms need to be regulated to avoid monopoly power related to large network effects.
Bio/Vote History
         
Carletti Elena Carletti Bocconi Agree 4
Bio/Vote History
         
Danthine Jean-Pierre Danthine Paris School of Economics Agree 4
With a level playing field I agree that the new form of competition brings in benefits. The legacy of past licensing has to be address, howe
Bio/Vote History
         
De Grauwe Paul De Grauwe LSE Did Not Answer
Bio/Vote History
         
Eeckhout Jan Eeckhout University College London Agree 9
Bio/Vote History
         
Fehr Ernst Fehr Universität Zurich Strongly Agree 1
Bio/Vote History
         
Freixas Xavier Freixas Universitat Pompeu Fabra Strongly Agree 10
An application of classical microeconomic theory. Taxes on taxis should adapt.
Bio/Vote History
         
Fuchs-Schündeln Nicola Fuchs-Schündeln Goethe-Universität Frankfurt Did Not Answer
Bio/Vote History
         
Galí Jordi Galí Universitat Pompeu Fabra Agree 7
Bio/Vote History
         
Garicano Luis Garicano LSE Did Not Answer
Bio/Vote History
         
Giavazzi Francesco Giavazzi Bocconi Agree 7
conditional on the caveat above
Bio/Vote History
         
Griffith Rachel Griffith University of Manchester Strongly Agree 9
Bio/Vote History
         
Guerrieri Veronica Guerrieri Chicago Booth Agree 8
Bio/Vote History
         
Guiso Luigi Guiso Einaudi Institute for Economics and Finance Strongly Agree 7
Bio/Vote History
         
Hellwig Martin Hellwig Max Planck Institute for Research on Collective Goods Agree 7
There is a question whether such entry would not simply induce traditional suppliers to exit.
Bio/Vote History
         
Honohan Patrick Honohan Trinity College Dublin Agree 2
Bio/Vote History
         
Kleven Henrik Kleven Princeton Strongly Agree 7
Bio/Vote History
         
Krahnen Jan Pieter Krahnen Goethe University Frankfurt Agree 6
Bio/Vote History
         
Krusell Per Krusell Stockholm University Strongly Agree 9
Bio/Vote History
         
Kőszegi Botond Kőszegi Central European University Agree 8
Bio/Vote History
         
La Ferrara Eliana La Ferrara Bocconi Strongly Agree 7
Bio/Vote History
         
Leuz Christian Leuz Chicago Booth Agree 9
Classic concerns about open entry mitigated with online platforms. Not letting them compete on equal footing likely violates EU law.
-see background information here
Bio/Vote History
         
Meghir Costas Meghir Yale Strongly Agree 9
Bio/Vote History
         
Neary Peter Neary Oxford Agree 4
More competition is desirable. In this scenario Uber's only advantage is its superior technology and organisation, likely to be short-lived.
Bio/Vote History
         
O'Rourke Kevin O'Rourke Oxford Did Not Answer
Bio/Vote History
         
Pagano Marco Pagano Università di Napoli Federico II Agree 6
Bio/Vote History
         
Pastor Lubos Pastor Chicago Booth Agree 3
Bio/Vote History
         
Persson Torsten Persson Stockholm University Did Not Answer
Bio/Vote History
         
Pissarides Christopher Pissarides LSE Strongly Agree 1
It would break up tacit collusion from existing large companies
Bio/Vote History
         
Portes Richard Portes London Business School Agree 8
Licensed taxis should retain privileges (bus/taxi lanes, authorisation to pick up passengers hailing them on the street...) and compete.
Bio/Vote History
         
Prendergast Canice Prendergast Chicago Booth Strongly Agree 9
Bio/Vote History
         
Reichlin Lucrezia Reichlin London Business School Agree 5
Bio/Vote History
         
Repullo Rafael Repullo CEMFI Agree 6
Aggregate consumer welfare should go up, although some consumers might be worse off.
Bio/Vote History
         
Rey Hélène Rey London Business School Agree 6
Bio/Vote History
         
Schoar Antoinette Schoar MIT Strongly Agree 9
Bio/Vote History
         
Van Reenen John Van Reenen MIT Agree 6
Bio/Vote History
         
Vickers John Vickers Oxford Agree 7
Bio/Vote History
         
Voth Hans-Joachim Voth University of Zurich Agree 1
Bio/Vote History
         
Weder di Mauro Beatrice Weder di Mauro Gutenberg University Mainz and INSEAD Did Not Answer
Bio/Vote History
         
Whelan Karl Whelan University College Dublin Strongly Agree 10
Imposing restrictions on a particular sub-set of the market is unfair and hurts consumers.
Bio/Vote History
         
Wyplosz Charles Wyplosz The Graduate Institute Geneva Agree 6
Bio/Vote History
         
Zilibotti Fabrizio Zilibotti Universität Zurich Agree 10
Bio/Vote History
         

Question C Participant Responses

Participant University Vote Confidence Comment Bio/Vote History
Aghion Philippe Aghion Harvard Did Not Answer
Bio/Vote History
         
Allen Franklin Allen Imperial College London Uncertain 5
Trade-off of worker'w rights and consumers benefits is a difficult one.
Bio/Vote History
         
Antras Pol Antras Harvard Agree 7
Leaving aside potential congestion and environmental concerns, the quick rise of (among others) Uber indicates that competition was limited
Bio/Vote History
         
Baldwin Richard Baldwin The Graduate Institute Geneva Did Not Answer
Bio/Vote History
         
Besley Timothy J. Besley LSE Strongly Agree 10
Bio/Vote History
         
Blanchard Olivier Blanchard Peterson Institute Agree 1
Bio/Vote History
         
Bloom Nicholas Bloom Stanford Strongly Agree 10
Many taxi regulations help taxi firms and harm consumers - they restrict choice and keep prices high. It's a classic producer union.
Bio/Vote History
         
Blundell Richard William Blundell University College London Did Not Answer
Bio/Vote History
         
Bénassy-Quéré Agnès Bénassy-Quéré Paris School of Economics Agree 6
Bio/Vote History
         
Carletti Elena Carletti Bocconi Agree 4
Bio/Vote History
         
Danthine Jean-Pierre Danthine Paris School of Economics Uncertain 7
Some form of regulation may well be justified over the medium run even if it limits competition
Bio/Vote History
         
De Grauwe Paul De Grauwe LSE Did Not Answer
Bio/Vote History
         
Eeckhout Jan Eeckhout University College London Agree 9
Bio/Vote History
         
Fehr Ernst Fehr Universität Zurich Strongly Agree 1
obvious
Bio/Vote History
         
Freixas Xavier Freixas Universitat Pompeu Fabra Strongly Agree 10
For historical reasons the objective function in taxi regulation was related to tax revenue rather than consumer welfare
Bio/Vote History
         
Fuchs-Schündeln Nicola Fuchs-Schündeln Goethe-Universität Frankfurt Did Not Answer
Bio/Vote History
         
Galí Jordi Galí Universitat Pompeu Fabra No Opinion
Bio/Vote History
         
Garicano Luis Garicano LSE Did Not Answer
Bio/Vote History
         
Giavazzi Francesco Giavazzi Bocconi Agree 7
The licencing system with a predetermined number of licences should be replaced with one that only controls safety and similar stadards
Bio/Vote History
         
Griffith Rachel Griffith University of Manchester Agree 7
With qualification that in some cities (London) drivers invest in quality, and tougher price competition might diminish these investments.
Bio/Vote History
         
Guerrieri Veronica Guerrieri Chicago Booth Agree 8
Bio/Vote History
         
Guiso Luigi Guiso Einaudi Institute for Economics and Finance Strongly Agree 10
Bio/Vote History
         
Hellwig Martin Hellwig Max Planck Institute for Research on Collective Goods Uncertain 10
Key issues are price regulation and entry regulation. We need significant empirical information to assess their effects on consumers.
Bio/Vote History
         
Honohan Patrick Honohan Trinity College Dublin Agree 2
Bio/Vote History
         
Kleven Henrik Kleven Princeton Strongly Agree 7
Bio/Vote History
         
Krahnen Jan Pieter Krahnen Goethe University Frankfurt Uncertain 6
Welfare is affected by two effects, reduced competition (a minus), and increased safety/reliability (a plus). The sum is thus indeterminate.
Bio/Vote History
         
Krusell Per Krusell Stockholm University Agree 8
Bio/Vote History
         
Kőszegi Botond Kőszegi Central European University Uncertain 6
Bio/Vote History
         
La Ferrara Eliana La Ferrara Bocconi Agree 5
Bio/Vote History
         
Leuz Christian Leuz Chicago Booth Agree 7
Entry regulation mostly harmful. But there clearly is a case for (minimum) quality regulation, though some quality competition can be good.
Bio/Vote History
         
Meghir Costas Meghir Yale Agree 8
Bio/Vote History
         
Neary Peter Neary Oxford Agree 4
Bio/Vote History
         
O'Rourke Kevin O'Rourke Oxford Did Not Answer
Bio/Vote History
         
Pagano Marco Pagano Università di Napoli Federico II Agree 5
Bio/Vote History
         
Pastor Lubos Pastor Chicago Booth Agree 3
But some of them also help consumers by imposing standards. The net effect depends on the details.
Bio/Vote History
         
Persson Torsten Persson Stockholm University Did Not Answer
Bio/Vote History
         
Pissarides Christopher Pissarides LSE Strongly Agree 1
It does not apply to all countries but some do have very strong restrictions and not enough consumer protection
Bio/Vote History
         
Portes Richard Portes London Business School Agree 8
Licensing to confirm competences and confer corresponding privileges OK, but not to create rents through barriers to entry.
Bio/Vote History
         
Prendergast Canice Prendergast Chicago Booth Agree 8
Bio/Vote History
         
Reichlin Lucrezia Reichlin London Business School Agree 5
Bio/Vote History
         
Repullo Rafael Repullo CEMFI Strongly Agree 8
Bio/Vote History
         
Rey Hélène Rey London Business School Agree 7
Heterogeneous across countries. Density of cabs noticeably different across cities. Should be discussed together with congestion charge, etc
Bio/Vote History
         
Schoar Antoinette Schoar MIT Agree 8
Bio/Vote History
         
Van Reenen John Van Reenen MIT Agree 5
Bio/Vote History
         
Vickers John Vickers Oxford Agree 7
Bio/Vote History
         
Voth Hans-Joachim Voth University of Zurich Uncertain 7
The picture is mixed; some cities have been captured by the taxi lobby, as in the US; others boast cheap, safe, plentiful taxi services...
Bio/Vote History
         
Weder di Mauro Beatrice Weder di Mauro Gutenberg University Mainz and INSEAD Did Not Answer
Bio/Vote History
         
Whelan Karl Whelan University College Dublin Strongly Agree 10
Restrictive regulations relating to pricing or quantity supplied are rarely a good idea unless there is a clear market failure.
Bio/Vote History
         
Wyplosz Charles Wyplosz The Graduate Institute Geneva Strongly Agree 9
Bio/Vote History
         
Zilibotti Fabrizio Zilibotti Universität Zurich Strongly Agree 10
Bio/Vote History
         

About the European IGM Economic Experts Panel

This panel explores the views of European economists on vital public policy issues. It does this by polling them on important policy questions, by including a way for them to explain their answers briefly if they wish, and by disseminating these responses directly to the public in a simple format.

To that end, our panel was chosen to include distinguished experts with a keen interest in public policy from the main areas of economics, to be geographically diverse, and to include older and younger scholars. As with the IGM’s US panel, the experts are all outstanding researchers in their fields. The panel includes recipients of top national and international prizes in economics, fellows of the Econometric society and the European Economic Association, members of distinguished national and international policymaking bodies in Europe, recipients of significant grants for economic research, highly accomplished affiliates and program directors of the Centre for Economic Policy Research and the National Bureau of Economic Research, and past and current editors of leading academic journals in the profession. This approach not only provides a set of panelists whose names will be familiar to other economists and the media, but also delivers a group with impeccable qualifications to speak on public policy matters in Europe and beyond.

Questions for the European IGM Economic Experts Panel are emailed individually to all members of the panel. They are phrased as statements with which one can agree or disagree. The experts are also asked how confident they are in their knowledge of the issue associated with the question (10 being highest). Each panelist responds electronically at his or her convenience. Panelists may consult whatever resources they like before answering. They may also include brief comments with their responses, or provide links to relevant sources.

It is important to explain one aspect of our voting process. In some instances a panelist may neither agree nor disagree with a statement, and there can be two very different reasons for this. One case occurs when an economist knows a lot about a topic and yet sees the evidence on the exact claim at hand as ambiguous. In such cases our panelists vote "uncertain". A second case relates to statements on topics so far removed from the economist's knowledge that he or she does not feel well placed to judge. In this case, our panelists vote "no opinion".

Panelists suggest many of the questions themselves. Members of the public are also welcome to suggest questions (see link below). Although IGM faculty members are responsible for deciding the final version of each question, we send a draft of the question to the panel in advance and invite them to point out problems with the wording if they see any. This process helps us to reduce vagueness or problems of interpretation.

The panel data are copyrighted by the Initiative on Global Markets and will be analyzed for an article to appear in a peer-reviewed journal.

chicago booth