The Limits of Money in Daily Ridesharing: Evidence from a Field Experiment in Rural France

Ridesharing, as part of the sharing economy, is a rapidly growing sector and has the potential to solve major environmental and societal challenges related to daily transportation. The main obstacle in expanding ridesharing is motivating drivers and passengers to participate. We conducted a field experiment, in collaboration with a French ridesharing provider, to investigate whether extrinsic monetary incentives have motivation crowding effects for drivers in a real time ridesharing service. For each passenger rideshare request, we randomly assigned 3 euros or 7 euros as the compensation amount to drivers. This amount was shown simultaneously with the ridesharing request, so when the drivers saw the rideshare requests whilst driving, they could decide in real time whether or not to stop to pick up the passengers. After the trip has been completed, the drivers could choose to redeem their gains, and if they did so, we would invite them to a dictator game in which they were able to split their gains between themselves and a charity. The results from 128 rideshares during the northern summer 2017 show that the drivers? redemption and money split decisions are similar for the 3 euros and 7 euros groups, indicating that there are similar motivation profiles in both groups. Thus, increasing the monetary incentive levels has neither crowding-out nor crowding-in effects. Our results offer crucial policy insights to ridesharing providers. Instead of solely deploying monetary incentives to increase user participation, they could be better served, without having to resort to increased budget outlays, by considering non-monetary incentives which trigger the intrinsic pro-social motivations of the users of a rural ridesharing service. JEL classification: C93, D91, R41.