Data Analytics

Peer-to-peer sharing platforms such as Uber and Lyft significantly increase the flexibility of work. It is easy to join as drivers, and drivers have a lot of flexibility in choosing their work schedule. Naturally, one would expect the availability of these flexible working options to help improve consumers' personal finance and lower credit default rates.

To test this hypothesis, we design the following analysis. We focus on individuals whose residence is in city ABC (an anonymous city). Next, within this population, we compare the credit default rates of those who have driven for Uber or Lyft in the last 12 months with the credit default rates of those who have not driven for Uber or Lyft during the same time. Both Uber and Lyft have been available in the city for over 2 years, and they are the only car sharing apps available in the city. No other peer-to-peer sharing platforms are available in the city. The credit default rate data covers the same time period, i.e., the last 12 months.

If the credit default rates are lower (or higher) among those who have driven for Uber or Lyft in the last 12 months after we control for income, age, education, household size and other observable demographic variables in our analysis, can we conclude that the availability of Uber and Lyft decreases (or increases) credit default rates? Why yes or no? Justify your answer.