Uber and the American Worker
Over the last decade, I have consumed about as much political research as anyone in the world. And good political research, like good business research, yields the most insights when it’s not about politics or business but simply getting the best understanding of how people are living their lives, their challenges and aspirations. What that research showed, universally and unequivocally, is that most people in America say they have too little money and too little time, and the two are closely connected. And they’d like more control of both.
Uber and platforms like it helps solve for both of these pain points. Lately, there has been a growing debate about the future of work and the people engaging in flexible and freelance work through the sharing economy and on-demand platforms.
This is happening at a time when stagnant wages present the biggest economic challenge of our time. Incomes are growing at around the same rate as they did in 2010. And real median household incomes are down 7.2 percent since the turn of the century.
The Bureau of Labor Statistics estimates that 20 million Americans are forced to work part-time for “non-economic reasons” like child care or education. And 47 percent of people in the U.S. say they would struggle to handle an unexpected $400 bill, and a third of those said they would have to borrow to pay it.
Fourteen months ago when I joined Uber, the scale of our two big marketplaces — driver and rider — and the resulting economic impact of the platform was just coming into view.
As those markets become larger than even we imagined, we’re discovering that platforms like Uber are boosting the incomes of millions of American families. They’re helping people who are struggling to pay the bills, earn a little extra spending money, or transitioning between jobs. This is now happening on an unprecedented scale.
Uber currently has 1.1 million active drivers on the platform globally. Here in the U.S., there are more than 400,000 active drivers taking at least four trips a month. Many more take only a trip or two to earn a little extra cash. It adds up: in 2015, drivers have earned over $3.5 billion. And by the way, only about 40 percent of drivers are still active a year after taking their first trip.
This is important. Most drivers are not making a decision to do this for a lifetime or even for a long time. We are grateful for those who do, but one of the key attractions of the platform is that it works for you when you need it, and you don’t need to make a commitment beyond that.
On average, half of all drivers in the U.S. drive fewer than 10 hours a week. More than 40 percent drive fewer than 8 hours per week. And the average number of hours driven continues to fall; in fact, it’s down more than 10 percent since the beginning of the year. This is crucial: for most people, driving on Uber is not even a part-time job…it’s just driving an hour or two a day, here or there, to make a little extra money.
In essence, then, many people are driving on the Uber platform to get the pay raise they have not received in their other jobs. Or to help themselves when they get in a tight spot. And drivers consistently report what they prize most about the Uber platform is the flexibility of being able to work around job, family, school, and other obligations.
In fact, nearly 90 percent of drivers say they choose Uber because they want to be their own boss and set their own schedule. In other words, they want work that fits around their life — not the other way around.
And they don’t have a set schedule week to week; around 65 percent of drivers vary their hours from week to week by more than 25 percent.
That means you’re more likely to find someone who drives 10 hours one week and zero hours the next week than someone who works every Tuesday and Wednesday from 5 to 10 pm. Indeed, there is another debate right now about the practice of on-call scheduling — employers minimizing their labor costs by keeping workers on an unpredictable and ever-changing schedule. With Uber, there is no schedule. Ever.
The numbers show just how attractive this type of work is to people around the country. Today more than 48,000 people drive with Uber in Los Angeles; more than 10,000 in Philadelphia; 10,000 in Austin; over 15,000 in Atlanta; and 35,000 in Chicago and 27,000 in Washington, DC. Most of that growth is in the last two years. Think about that. If a factory suddenly appeared in a major American city and created thousands of jobs in just two years, there would be ticker-tape parades.
Increasingly, people do not talk about becoming “an Uber driver.” It’s much simpler decision: I’m going to make some money while using my car.
Cars are one of the most expensive assets a typical American family buys and maintains — yet they sit unused 96 percent of the time. We only use our cars four percent of the time! It’s hard to think of another expensive item that we use so little. Driving with Uber means people can get more value out of this expensive asset. It means they can turn their car into an income generator.
In China we recently launched uberCOMMUTE, which is a way to share your car as you travel to and from your job. Eventually, you could imagine a world in which people turn on the Uber app while running errands or visiting friends, making a little extra money as they move around town. Over time that would cut congestion by reducing the number of people owning cars, and would lower the cost of living for those who do own a car.
With platforms like Uber, you can fit work around the rest of your life. And ridesharing is making transportation more affordable for low-income residents all across the world. There are of course valid questions about what adjustments policymakers will have to make if more people work for themselves, on platforms like Uber or others.
That’s why we wanted to lay out holistically a look at how Uber and platforms like it are positively affecting the economy — and, more importantly, the people who make up our economy. Some approach the on-demand economy as if it’s a problem that needs solving. But when you look at the full picture of how people are truly using these platforms and seizing these economic opportunities, it’s clear that this is much more of an opportunity to be seized than a problem to be solved. The question is how can we build on and strengthen these important gains. We look forward to that debate and will engage in it on behalf of the tens of millions of people over the coming years who will benefit from these innovations.