Question

Taxi drivers work in 12-hour shifts, with most of them having shift-change time around 5pm. In other words, there are two shifts: 5am-5pm (day shift) and 5pm-5am (night shift). Do dayshift taxi drivers earn more than night-shift taxi drivers? What economic theories and factors would you use to answer this question? Discuss.

Answer 1

There is no concrete answer to whether the day shift or night shift taxi drivers earn more. It depends on several crucial factors which are as follows.

(1) Nature of the place: The city/town one is driving a taxi is important. if it is a big city with developed nightlife and restaurants, there is scope for the night time rivers to earn more. More generally, a major part even in developed countries is not home to highly involved nightlife and on average this factor would favor earning in day time.

(2) Safety: People are more concerned about the safety when they are travelling in the night. Thus, the basic safety regulations in the place and crime rate can affect the earning of night-time workers.

(3) Higher prices: The night time cabs are generally offered at higher prices. It is a surcharge for the late-night services. Since the demand for cabs late night is fairly inelastic, (no substitutes) the night time cabs can make more profits if they raise the price up to a certain point.

(4) Less competition: There is also lesser competition for rides in night. Most of the drivers would want to follow the natural sleeping pattern of humans and would want to drive at night. This reduces the number of drivers in the nigth and thus the competition for rides.

(5) Productivity: Since night time drivers are working against the natural cycle, their productivity can suffer. For instance, they are more likely to fall asleep or involved in an accident. This can negatively affect the nigh time earnings.

Thus, there are several demand and supply factors which will ultimately decide whether day or night time earning potential is higher.