February 24, 2016 |

New Data Shows Comprehensive Economic Benefits Of Ridesharing

When contemplating the most revolutionary innovations that have emerged from the sharing economy renaissance, ridesharing inevitably rises to the top. By providing everyone in possession of a smartphone the ability to safely and cheaply hail rides and move around cities with unprecedented ease, ridesharing companies have fundamentally altered how we think about transportation as a part of our daily lives. However, democratizing access to on-demand transportation services is only the tip of the iceberg in terms of the impact ridesharing has had on our economy. New data from companies like Uber and Lyft provides insight into the many ancillary benefits provided by these platforms, helping us to understand the truly transformational ripple effects that these innovative services are causing in every corner of the global economic landscape.

One of the most powerful benefits of ridesharing is flexibility – the paramount reason for which both riders and drivers use these platforms. Flexibility allows drivers to become their own bosses, where they can maintain an optimal work-life balance and drive during hours convenient to their schedules. As David Plouffe states, 87 percent of Uber drivers drive with the company “to be their own boss and set their own schedule.” 85 percent of Uber drivers say the flexibility and optimal work life balance that ridesharing offers influenced their decision to work with the company. 60 percent of Lyft drivers schedule their hours around a part-time or full-time job. 78 percent of Lyft drivers work fewer than 15 hours per week, and more than half of Uber drivers work fewer than 10 hours per week. This flexibility, while sometimes overlooked in thinking about the economic benefits of ridesharing, impacts the economy by allowing drivers to boost their overall economic output during time periods when they might not otherwise be able to do so.

Lyft and Uber also equip drivers with the opportunity to earn a better living. Both companies provides drivers with unique opportunities to earn supplemental income in addition to either full or part-time employment. 86 percent of Lyft drivers are employed or actively seeking employment, and 61 percent of Uber drivers work full or part-time jobs in addition to driving with the company. Ridesharing allows driver partners to contribute to the economy while positioning themselves to earn better wages and make ends meet.

Ridesharing companies do not only help individuals with their personal finances, but also contribute directly to the success of small businesses. 25 percent of Lyft drivers own a business, 70 percent of whom use Lyft earnings to run those businesses. Additionally, 31 percent of Uber rides in San Francisco begin or end at independent or small businesses across the city. Ridesharing serves as a critical mode of transportation for commuters to and from small businesses, and its contributions to the local economy are critical for regional financial health.

Ridesharing also serves as an efficient and empowering means of transportation for passengers. Lyft reports that passengers saved 3.9 million hours in 2014 riding with the company compared to traveling via alternative modes of transportation. In other words, Lyft saved their passengers in over 65 cities the equivalent of $125 million in time savings over 162,500 days – or just over 445 years. In addition to these economic benefits, Lyft enables passengers to commute to work, visit family and friends, or run errands in a safe and reliable manner.

In addition to direct economic impacts, ridesharing companies improve social outcomes as well. For example, companies like Uber and Lyft work together to prevent automobile accidents and reduce fatalities caused by drunk driving. 84 percent of Lyft passengers stated the company’s services made them more likely to avoid driving while impaired. A study conducted by Uber and Mothers Against Drunk Driving found that when more transportation options like Lyft and Uber exist, people do not drive intoxicated. Since Uber’s inception in both California and Seattle, Washington, drunk-driving decreased by 10 percent in those states. As a result of this kind of success, Evesham Township, New Jersey, recently announced its plans to become the first city to offer free-rides for passengers who have been drinking. These trends demonstrate that ridesharing not only empowers consumers with flexibility or income, but also ensures safe commuting whenever and wherever their travels take them.

Ridesharing provides consumers with important supplementary benefits that directly contribute to individual, regional, and national financial success. Legislators and members of the public should pay close attention to all of the robust benefits – including the tangential impacts uncommonly associated with ridesharing – that companies like Lyft and Uber provide for consumers, the economy, and society as a whole

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IA and Columbia’s Richard Paul Richman Center today released a new research paper entitled, “Toward A Better Understanding Of Internet Economics.”

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