COVID-19 and Platform Switching of Multihoming Workers in the Gig Economy

We examine the activities of multihoming workers in the gig economy, characterized by their switching between gig economy platforms, during the COVID-19 pandemic. Drawing on the conservation of resources (COR) theory, we use a comprehensive dataset from an analytics company that tracks the activities of drivers working for multiple platforms to develop a theory-driven empirical framework. We systematically estimate the impact of the COVID-19 pandemic and drivers’ propensities in switching platforms. Our findings show a significant decrease in drivers working for a ride-hailing platform during the lockdown period, which recovered after the reopening. The number of COVID-19 cases increases the propensity of drivers to switch from ride-hailing platforms to delivery ones. Further analyses on the effect of monetary incentives from the platforms show that drivers’ switching behaviors exhibit greater sensitivity to the base hourly earnings from ride-hailing platforms compared to those from delivery platforms. Bonus earnings provided by delivery platforms are particularly effective in incentivizing drivers to continue working on the platforms. Finally, our platform-specific estimation shows that drivers find it relatively easier to switch between Uber and Uber Eats compared to switching between Lyft and these Uber-related platforms. A diversified platform firm with different services (e.g., ride-hailing service from Uber and delivery service from Uber Eats) has strong capabilities in retaining workers and considerable control over their switching costs. Overall, our study uncovers important patterns about the activities of gig workers switching platforms and adapting to changing circumstances, which can inform platforms and policymakers to design strategies and work arrangements during major disruptions