Learning by Driving : Productivity Improvements by New York City Taxi Drivers

We study learning by doing (LBD) by New York City taxi drivers, who have substantial discretion over their driving strategies and receive compensation closely tied to their success in finding customers. In addition to documenting significant learning by these entrepreneurial agents, we exploit our data's breadth to investigate heterogeneity in performance and the mechanisms of driver improvement. New drivers vary in their individual learning rates and as a group lag farther behind experienced drivers when in difficult situations. Drivers benefit from accumulating neighborhood-specific experience, which affects how they search for their next customers