In Libertarian Land, Uber drivers would not need a government-issued license. Ridesharing apps are already incentivized to self-impose employee safety regulations, and new evidence suggests that additional government licensing is unlikely to produce much benefit.
Using data from New York, New Jersey, and Houston, this study
examines whether licensing adds meaningful consumer benefits in a market where private platforms already monitor performance.
In the
New York City–New Jersey analysis … [l]icensed drivers received slightly lower rider ratings than unlicensed drivers: Their average ratings were less than 0.5 percent lower, and they were about 0.9 percentage points less likely to receive five stars. [The researchers also] found little consistent evidence that licensed drivers drove more safely.
In Houston, researchers compared results before and after deregulation:
These new, unlicensed drivers … were statistically indistinguishable from previously licensed drivers in both rider ratings and measures of hard braking and acceleration. … [The data provides] no evidence that Houston’s licensing and screening system selected drivers with safer observable driving behavior.
Taken together, these results confirm that introducing occupational licensing restrictions into an already self-regulating market has little marginal benefit.
