Birth of the Rider:Digital Platforms,Targeted Matching and Job Creation
The gig economy exemplified by online delivery staff and ride-hailing drivers has experienced rapid growth,outpacing the traditional economy in terms of expansion and emerging as a vital factor augmenting employment opportunities.Existing literature often attributes this trend to the natural consequences of digital technology advancement and the cross-side network effects inherent in digital platforms,but underestimates the intricacies involved in job creation,overlooking the prerequisites for digital platforms to generate employment and the need for governmental oversight.This paper constructs a theoretical model including a food delivery platform,an online restaurant,an offline restaurant,and different workers and consumers to delve into the underlying mechanisms of digital platforms'job creation abilities,and the evolving patterns of workers'welfare throughout various phases.Our model suggests that the cornerstone of digital platforms'sustained job creation lies in their distinctive targeted matching mechanism.Unlike traditional platforms that primarily function as informational intermediaries and transactional mediums,digital platforms harness their precise identification of supply and demand data to actively participate in workforce scheduling and allocation.This innovative matching approach,which is rooted in digital technologies,centered around the digital platform,and characterized by its precision targeting,can ensure maximum continuity and stability in employment prospects,significantly activating and amplifying the cross-side network effect within the platform economy.Consequently,this becomes a pivotal enabling factor for the massive generation of new professions and job opportunities,effectively elevating workers'welfare.Furthermore,this paper uncovers that while the targeted matching mechanism of digital platforms is highly effective,it still has flaws,necessitating government intervention.At the early stage of the gig economy,the targeted matching efficiency of digital platforms requires enhancement.Nonetheless,as efficiency increases,the employment opportunities it brings far exceed the potential job losses,thereby driving the expansion of the gig economy,bolstering overall worker earnings,and augmenting social welfare.However,as the gig economy matures,despite the high targeted matching efficiency achieved by digital platforms,the misuse of market advantages by incumbent platforms can lead to an efficiency-driven crowd-out effect that outweighs employment opportunities,giving rise to the problem of unemployment.This can also result in problems such as uneven benefit distribution between digital platforms and workers,and exorbitant transaction fees imposed by platforms.To alleviate these problems,establishing a competitive platform market is imperative.However,it is not necessarily true that the stronger the market competitiveness,the better.Excessively low entry barriers in the platform market can distort the behaviors of established digital platforms.Hence,while fostering market competition,the government must adapt the ease of market entry to the dynamic market environment timely and appropriately,which ensures that the employment-boosting and welfare-enhancing impacts of digital platforms are maximized.
gig economyintegration of digitalization and realityplatform regulationcontestable market