The labor supply theories predict that the working hours differ with transitory changes in wages and hourly wages. The standard economics suggests that people will be prompted to work for long hours in a case of a temporary increase in wages. However, the behavior of the cabdrivers is contrary to the economic predictions as they tend to work for few hours during the rainy season. Another explanation is that, unlike other workers, most cab drivers lease their cabs for a fixed fee from a fleet. This means they have to choose the working hours each day. For instance, during a continuous 12-hour shift, they may drive as far as they pick or drop a client. CBLT economists presented a model based on the log daily hours on average hourly earnings. This model suggests that the function of the labor supply is negatively sloped which means that hours worked will reduce with a transitory change in the wage. The measure of the labor supply uses either hours or income which is recorded from the “trip sheet” of cabs’ installed meter. The fares are automatically recorded by the meters. Therefore, on a rainy night the demand and fare rate for the cabs' service is high and cab drivers will not wait for customers for longer hours. They meet their fixed driving hours faster and quit.
Behavioral economics provides driving experience as another possibility of the cabdrivers working few hours on rainy nights. The driving experience differs and most drivers may not get a clear “head-view” due to fog and less light from the cabs’ headlight. Therefore, most of the inexperienced driver will quit working on rainy nights and forego the high demand for cabs’ service as opportunity cost for safety.
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