Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

Monday, September 28, 2020

COVID-19 and Digital Resilience: Evidence from Uber Eats

COVID-19 and Digital Resilience: Evidence from Uber Eats

Manav Raj

New York University (NYU) - Leonard N. Stern School of Business

Arun Sundararajan

NYU Stern School of Business; New York University (NYU) - Center for Data Science

Calum You

Uber Technologies Inc.

Abstract

We analyze how digital platforms can increase the survival rate of firms during a crisis by providing continuity in access to customers. Using order-level data from Uber Technologies, we study how the COVID-19 pandemic and the ensuing shutdown of businesses in the United States affected independent, small business restaurant supply and demand on the Uber Eats platform. We find evidence that small restaurants experience significant increases in total activity, orders per day, and orders per hour following the closure of the dine-in channel, and that these increases may be due to both demand-side and supply-side shocks. We document an increase in the intensity of competitive effects following the shock, showing that growth in the number of providers on a platform induces both market expansion and heightened inter-provider competition. Our findings underscore the critical role that digital will play in creating business resilience in the post-COVID economy, and provide new managerial insight into how supply-side and demand-side factors shape business performance on a platform.

https://lawprofessors.typepad.com/antitrustprof_blog/2020/09/covid-19-and-digital-resilience-evidence-from-uber-eats.html

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