Driving for Uber
The next time you call up a ride, it may not be the iconic yellow taxi that pulls up to your doorstep. Since 2012, Uber has caused a revolution in the driving service sector by hiring ordinary people as drivers. Rapidly expanding from a small carpooling app in San Francisco to one of the most influential companies in the world, Uber now has a market capita of over $60 billion. This explosion of growth has caught the attention of start-ups, politicians, and the media, all promising the advent of the “next big thing”: the gig economy, a system based on independent contractors and short term work rather than 9-5 jobs.
Princeton economist Alan Krueger has stated that “Uber is the quintessential employer of gig work,” and in a recent study conducted along with Harvard economist Jonathan Hall, it was discovered that Uber reigned as the king of online gig employment. Uber alone had more than double the amount of Google searches of the next 10 online gig employment platforms combined and constitutes 400,000 drivers out of the 600,000 people actively working in gig-based jobs.
Although this study found the overall online gig economy to be smaller than expected, with only 0.5 percent of Americans actively working in online gigs and another 0.5 percent earning passive income, there are substantial implications for the hundreds of thousands currently employed by Uber. Unlike the older demographic canada goose jackets mens that can passively participate in the gig economy by renting out their vacation home or selling household accessories on Etsy, those actively working for platforms such as Uber largely consist of a much younger demographic.
20 percent of Uber driver-partners are below 30, compared to just 8 percent of taxi drivers, and while almost half of the Uber driver-partners have four-year college degrees, only 18 percent of professional taxi drivers have comparable degrees. The majority of Uber drivers do not treat Uber as their primary source of income, with 31 percent of drivers having a full time job and a further 30 percent holding part-time employment elsewhere. A 2015 study by J.P. Morgan discovered that the average worker who provided labor for a gig platform earned an average of $533 per month, which was approximately one-third of the total average income they would earn.
This amount of additional income is highly significant to younger workers, particularly those between the ages of 18 and 24, who experience the greatest instability in month-to-month earnings. According to J.P. Morgan, over 70 percent of young workers experience their monthly income swing as much as 30 percent, often resulting in missing bill or rent payments. In discussing the rise in popularity of gig employment, Krueger addresses how the popularity of such platforms is indicative of the need for measures to “help people smooth their incomes from up and down periods.”
Furthermore, the flexibility of working whenever, rather than being fixed to a certain schedule, was something that attracted a large proportion of Uber’s drivers. Some of the top reasons stated for working for Uber included “being my own boss and setting my own schedule (87%)” and “to have more flexibility in my schedule and balance my work with my life and family (85%).” As a result of this flexibility, drivers do not need to dedicate solid 9-5 blocks of time to driving, instead focusing on family, studies, or finding another job, while converting scattered hours of downtime that cannot be used for traditional employment into a consistent stream of income.
Although few individuals treat Uber as a full-time job, this gig economy has demonstrated the need for such opportunities to earn money on-the-go. Whether such routines will replace the standard 9-5 day is yet to be seen, but there is much value in creating an instantaneous market for labor and services. As Uber expands its reach to delivering ice cream nationwide, roses on Valentines Day, or even barbeque in Texas, we see just the beginning of the sharing economy, in which just about any chore or task can be outsourced to anyone with an hour or two to spare.