Computing the Social Value of Uber. (It’s High.)
That’s the headline of a recent Bloomberg article that attempts to put Uber, both the company and the ride-share business model generally, into the perspective of overall economic gains or losses for society. Does Uber, in other words, have a positive or negative value to society?
Based on the findings of a group of academic economists in their paper, “Using Big Data to Estimate Consumer Surplus: The Case of Uber,” the answer is that Uber is an unqualified net positive for the world at large. And this being a work of academic economic analysis, that good can be more or less precisely quantified: Every $1 spent by UberX customers in the four cities studied generated around $1.60 in “consumer surplus.” The authors extrapolate from the sample cities to an estimate of UberX’s nationwide social value: $6.8 billion a year, over $20 for every American.
There’s no doubt that the Uber’s cheap and convenient ride service has been a boon to many, some of whom would otherwise depend on their own cars or on more expensive, less convenient forms of transport. It’s also unquestionable that there have been losers in the transition to a sharing economy. First and foremost among the losers have been taxi drivers, a fact acknowledged by the study. But the economic disruption of that narrow job function isn’t the only potential negative effect of widespread ridesharing, according to a report issued by the University Transportation Research Center.
That report, which is being heavily promoted by the taxi industry, calls out ridesharing services for their part in a series of alleged societal negatives, including the following:
- Failure to accommodate handicapped riders. (Rideshare services are not bound by the Americans with Disabilities Act, as taxis are.)
- Failure to adequately serve poor and minority areas.
- Increasing pollution and congestion, as rideshare vehicles displace public transportation.
- Lack of corporate responsibility and fair business practices, exemplified by aggressive tax-avoidance schemes that deprive communities of revenue and allow rideshare services to operate at an unfair cost advantage to traditional taxis.
- Exploitive employment practices, depriving drivers of their rights by classifying them as contractors rather than full-time workers.
In summary, the report characterizes Uber and its ilk as “nothing more than a privileged access model that operates to the detriment of those in most need of their services.”
So, Uber: It’s either society’s savior or society’s scourge. Dueling narratives, supported by conflicting reports. Maybe it’s one, maybe it’s the other. Maybe it will turn out to be both. Time will tell.
Reader Reality Check
Uber, pro or con: How say you?
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After 20 years working in the travel industry, and 15 years writing about it, Tim Winship knows a thing or two about travel. Follow him on Twitter @twinship.