  While the growth of TNCs took a substantial part of ridership and asset value
away from the traditional taxi industry, existing taxi market policy
regulations and planning models remain to be reexamined, which requires
reliable estimates of the sensitivity of labor supply and income levels in the
taxi industry. This study aims to investigate the impact of TNCs on the labor
supply of the taxi industry, estimate wage elasticity, and understand the
changes in taxi drivers' work preferences. We introduce the wage decomposition
method to quantify the effects of TNC trips on taxi drivers' work hours over
time, based on taxi and TNC trip record data from 2013 to 2018 in New York
City. The data are analyzed to evaluate the changes in overall market
performances and taxi drivers' work behavior through statistical analyses, and
our results show that the increase in TNC trips not only decreases the income
level of taxi drivers but also discourages their willingness to work. We find
that 1% increase in TNC trips leads to 0.28% reduction in the monthly revenue
of the yellow taxi industry and 0.68% decrease in the monthly revenue of the
green taxi industry in recent years. More importantly, we report that the work
behavior of taxi drivers shifts from the widely accepted neoclassical standard
behavior to the reference-dependent preference (RDP) behavior, which signifies
a persistent trend of loss in labor supply for the taxi market and hints at the
collapse of taxi industry if the growth of TNCs continues. In addition, we
observe that yellow and green taxi drivers present different work preferences
over time. Consistently increasing RDP behavior is found among yellow taxi
drivers. Green taxi drivers were initially revenue maximizers but later turned
into income targeting strategy

Applications;General Economics;Physics and Society;Economics