The economic case for Uber in France
Posted by Daniel Szomoru, Policy Insights & Research
If you’ve ever visited Paris, you know it’s not the easiest place in the world to get a ride. In fact, their struggle to hail a cab in Paris one snowy night inspired Uber’s founders to come up with a service to provide rides on demand. While millions of riders in France rely on Uber for greater mobility, drivers are drawn to us for another reason: economic mobility. In a country where 25% of people under 25 are unemployed, Uber has been a lifeline for some 14,000 drivers. This week a new study (in English and in French) confirms that Uber is providing work opportunities for the very people who need them most.
We partnered with two leading French economists from the Toulouse School of Economics and HEC to analyze driver data. We found that a large number of drivers who use Uber in France are young, come from poor neighborhoods, and started driving for Uber after struggling to find work elsewhere. 34 percent of drivers on the Uber platform are under 30, compared to only 12 percent of taxi drivers. Their youth makes them particularly likely to be out of work; a quarter of them were unemployed before signing up for Uber, many for over a year. More than half come from low-income neighborhoods where it is difficult to find a job, even with an education.
Why is Uber such a popular option for workers in France? Our research found that most are attracted to our low barriers to entry — they can start driving and making money almost immediately, and on their own terms. 91 percent of drivers said they chose Uber because it is a good fit for them, while only 9% said they drive because it is their only option. Some drive full-time, and others drive just a few hours a week to pay a bill or cover the rent. Flexible hours give them the freedom to pursue other job opportunities or grow their own businesses.
This report comes in the wake of threats of regulatory measures that could prevent 10,000 drivers from earning a living overnight. We estimate that 40 percent of drivers would still be unemployed one year after such changes are made, and 20 percent would still be unemployed two years later. And these “regulatory shocks” would not only have a serious, lasting impact on people’s lives — they would also come at a steep cost to taxpayers. Research suggests that 10,000 new unemployed people would cost the French government €287 million per year in benefits.
By making some simple changes to today’s regulations, the government could help 70,000 people earn a living as professional drivers. Instead, apps like Uber, Chauffeur Privé and Heetch face massive legal uncertainty, and drivers are at risk of losing their livelihoods.
Today’s technology is creating new opportunities for the people and places that need it most. Change is never easy, but we hope to work together with policymakers and drivers to seize these opportunities before they pass us by.
You can read more about how Uber provides “a route out of the French banlieues” in the Financial Times.