Uber is used to connect riders with the drivers in what is related to the transportation. This in turn generates significant economic activity, as well as provides a range of economic opportunities. A great example of the total Uber’s impact can be seen in the City of Chicago. According to the most recent investigations of the issue, the total impact of the operations of Uber in the city was more than $46 million.
As revealed by the study performed by ECONorthwest, the Uber’s technology platform has brought the following economic contributions:
- The total gross impact on the economy of the city was up to $46 380 000 and as the time is passing by the impact is expected to be even larger. The economic impact is going to scale proportionately to the revenue growth of Uber.
- In 2013, both the efficiency and the convenience of Uber’s tech provided 25 000 extra rides in Chicago that is more than the transportation market would ever do without Uber’s options.
- Uber has also brought near 1 049 new jobs in the City of Chicago in 2013. But the thing is that Uber never hires drivers. The figure mentioned above includes the new direct jobs provided for the transportation providers and indirect jobs from transportation-related fields.
According to the experts, Uber has brightened financial future for many citizens and become the only source of support for many families.
In order to estimate Uber’s economic impact on the country’s macroeconomic level, the experts highlighted eleven cities with perfectly established Uber operations. The latter include providing three vehicle classes such as: UberX, UberBLACK and UberSUV. The overall economic impact of Uber is an actual sum total of every economic activity within the region that is linked to the business of Uber. This includes payments received from the Uber-Uber’s partners riders, all activities formed when partners begin to spend funds to provide rides, as well as all extra spending that partners tend to take on as a result of their income as drivers.
The additional value provided by Uber actually flows through every driver as well as supports additional economic activities even beyond the given ride. And finally, consumers also have a great opportunity to benefit from Uber economic rewards – by virtue of the fact they prefer to spend funds on the rides with Uber instead of the other alternative money use. That’s how the so-called ‘consumer surplus’ is being created.
The experts have estimated all incremental rides in a range of steps. With the help of the conservative estimates used for unknown parameters, the specialists have first revealed the implied perceived cost of each of Uber ride. It is important to mention that the calculation was performed on the basis of the estimated time cost of Uber, cross-price elasticity of the taxis demand and the observed market share of Uber rides. At the end of the process, the perceived cost was used in combination with the range of literature-based estimates of the demand price elasticity within the taxi field. The results have proven the expansion of the incremental supply of rides within the city.
- National Highway Traffic Safety Administration, Alcohol-Impaired Driving, Dec. 2013, at http://www-nrd.nhtsa.dot.gov/Pubs/811870.pdf.
- Alliance Against Intoxicated Motorists, 2012 DUI Facts, at http://www.aaim1.org/resource_facts.asp.
- Dr. Robert Bruno, Driven Into Poverty, University of Illinois’ School of Labor and Employment Relations, at http://www.ler.illinois.edu/labor/ images/Taxi_Income_Report_-_Final_Copy.pdf.
- Emily Badger, Taxi medallions have been the best investment in America for years. Now Uber may be changing that, The Washington Post, Nov. 27, 2014, at http://www.washingtonpost.com/blogs/wonkblog/wp/2014/11/27/as-uber-fights-new-battles-over-privacy-an-older-war-simmers-with-thecab-industry/.
- I-Team: Cab Riders’ Gripes, Drivers Exposed, WLS-TV, May 13, 2014, at http://abc7chicago.com/archive/9535692/.
- Jason Meisner, Cynthia Dizikes and Joe Mahr, Tribune Investigation: Courts drop most cases against frequently ticketed cabdrivers, Chicago Tribune, Sept. 23, 2011, at http://www.chicagotribune.com/news/local/breaking/ chi-tribune-investigation-courts-drop-most-cases-against-frequently- ticketed-cab-drivers-20110922-story.html
- Rules and Regulations for Affiliations, City of Chicago Department of Consumer Services Public Vehicle Operations Division, Dec. 23, 2001, at http://www.cityofchicago.org/dam/city/depts/bacp/rulesandregs/ rulesforaffiliations082909.pdf.