From a diary of a part time Uber and Lyft driver:
Monday nights are usually slow, and since I had already made more than usual, I called it a night at 5:36 p.m. and signed off the apps.
Some people, some of the time, are driven by the income effect. I want to make $x. Some people, some of the time, are driven by the substitution effect. My leisure is worth $y to me, if people are paying my $y+ then I’ll work.
Actually, near everyone is near always driven by a blend of the two effects. As it happens, empirical studies show that cab drivers are more motivated by that income effect.
So, when traffic for rides for hire is high what do we do about it? Try to kick people over to the $y+ part by raising the pay on offer.
There is significant economic insight behind this part of the gig economy. And substantial increases in utility as a result – it’s a lot easier to get a ride in the rain….