Social and Behavioral Sciences Commons^™

Misalignment Between Societal Well-Being And Business Profit Maximization: The Case Of New York Taxis Drivers’ Incentive System, Andrew S. Manikas, James R. Kroes, Thomas F. Gattiker

IT and Supply Chain Management Faculty Publications and Presentations

Objectives of business sustainability efforts commonly include increasing consumer safety, decreasing resource consumption, and decreasing pollution. Even though there is a societal interest in attaining these goals, business and other economic agents often operate under incentive structures that run counter to these objectives. Taxi drivers operate as economic independents. Their revenue depends on their fares and tips. Moreover they choose how many hours to work, how fast to drive, and which route to take. Using New York City taxi data from 2013, we test the level of alignment between the revenue maximizing behavior of drivers versus safety, conservation and pollution- …