Dynamic Pricing in a Labor Market

Abstract

In many markets, new technologies allow traditional jobs to be divided into discrete tasks that are widely distributed across workers and dynamically priced given prevailing supply and demand conditions. This "sharing" or "gig" economy represents a more flexible work system, and is most common in two-sided markets in which a firm acts as a platform to connect service providers and consumers. One prominent example of this is the ride-sharing company Uber, which connects riders and driver-partners, and dynamically prices trips using a system known as "surge" pricing. In this talk, I discuss the practical problems of designing such a dynamic pricing system, how that dynamic pricing coordinates workers who can now earn compensation on a flexible schedule, and more broadly how the "gig" economy is evolving and growing as a form of market organization.