One consolation for often weary office workers on a work trip to another city is that their employer foots the bill. For some taxi drivers, that’s a business opportunity.
A team of economists looked at the taxis of Athens to study the problem of moral hazards, where more risks are taken when there are no consequences. The team sent researchers to take 400 rides on 11 different routes in the Greek capital. All of them mentioned to the driver that they were unfamiliar with the city, but in only half of the rides, they requested a receipt ahead of time and told the drivers that their employer would reimburse them.
In those cases, the passengers were 17% more likely to be overcharged on their trips; they paid a fare that was 7% higher than those who did not mention the receipt, according to their findings, published in a paper in the Economic Journal (pdf) last month.
Even worse, the drivers overcharged their passengers not by taking a longer route, but by adding on false charges, such as a fees to travel from a bus station or airport, or charging a higher nighttime fare during the day. All of the researchers spoke Greek, said Loukas Balafoutas, the lead author.
Women were also overcharged 18% more of the time than men regardless of whether they informed the driver that the boss would cover the cost of the ride.
That said, the findings may be tainted by the fact they were carried out in Greece—one of the more corrupt developed countries in Europe and one where there are no women in senior positions in government at all (pdf), according to a 2017 European Commission study.
Image by Miguel Angel Riaño Trujillo/Flickr, licensed under CC-BY-2.0.