INTRODUCTION
SECTION ONE
Improving the Rider Experience
10
13
14
SECTION TWO
Creating Opportunities for Well-Paying and Flexible Work
15
16
17
18
SECTION THREE
Supporting a Safe and Sustainable City
19
20
22
24
Lowering the demand for parking and freeing up valuable urban real estate
26
CONCLUSION
REQUEST
RIDE
RATE
Riders enjoy the convenience of paying without cash because the cost of the ride is billed directly to the credit
card they have linked to their account. Not only are driver-partners required to pass rigorous background
checks and driving record checks, but they must meet the exacting standards of riders as well: at the end of
each trip, riders rate their experience (from 1-5 stars) and have the opportunity to leave additional written
feedback about the trip.
UberIMPACT
Introduction
In 2010, Uber created a platform on which San Francisco residents could request a ride from for-hire drivers in
the vicinity using an app. Today, Uber coordinates millions of rides in San Francisco and the surrounding area
every month, and millions more daily worldwide. By virtue of a model that utilizes smartphone technology in
new ways, Ubers platform provides a safe, convenient, and affordable way for riders to get where they need to
go at a moments notice. At the same time, the Uber platform offers a reliable and flexible earning opportunity
for many thousands of independent for-hire drivers (driver-partners). Having lowered the barriers to entering
the for-hire driver market, the Uber platform has made for-hire driving a part- or full-time opportunity available
to anyone with the necessary vehicle, skills, and driving record.
Uber supplements the for-hire options available to San Franciscans and makes for-hire transportation a practical
option anywhere in the city. According to a 2013 study commissioned by the SFMTA, San Franciscos taxis were
not a reliable on-demand option. In no zone of the city did even half of taxi rides start within 15 minutes of
request, and a great number in every zone took longer than 30 minutes (or never took place at all).1 In contrast,
Uber rides start within two or three minutes on average, and almost never more than 15 minutes after request.
Uber also provides a novel option to for-hire drivers. A taxi driver in San Francisco typically pays a gate fee of
over $100 in order to drive a ten hour shift.2 If the driver wants or needs to cut the shift short, he or she might
end the day at a net loss. Only a full day of driving results in a reasonable hourly compensation. In addition, taxi
drivers are often pressured to make side payments to the providers they depend upon for gas and dispatching
services, further reducing their income.3 Finally, the medallion system that restricts the number of taxis in
San Francisco to around 2,000 mechanically limits the number of opportunities available to drivers who want
to work.4
The Uber app works as follows: a rider is shown the nearest available driver-partners on the Uber platform, and
can request an immediate ride. The nearest driver-partner is notified of the request and can choose to accept
it or not. If he or she does not accept it, the request then goes to the next nearest driver-partner. Because the
app allocates the nearest driver to each requesting rider, the average wait time for riders is roughly three
minutes throughout the Bay Area. Low wait times mean that driver-partners spend relatively little time on the
road without a passenger. The average uberX driver-partner completes 2.1 trips per hour,5 roughly 10% more
than his or her taxi driver counterpart.6 High utilization and low wait times mean that riders can depend on the
service and pay low fares, while driver-partners, who work more efficiently than for-hire drivers not on the
Uber platform, spend more of their time earning income.
UberIMPACT
UberIMPACT
As Uber has grown, its availability throughout the day and across the city has improved steadily. The following
figure demonstrates how average response times have evolved since uberX was launched in July 2012 in three
geographically distinct example neighborhoods:
BAYVIEW
AS UBER SCALES
MINUTES
7.5
5.0
RESPONSE TIME
2.5
JAN. 13
JAN. 14
JAN. 15
JAN. 13
JAN. 14
JAN. 15
JAN. 13
JAN. 14
JAN. 15
THE MISSION
MINUTES
3.0
2.0
1.0
MINUTES
7.5
5.0
2.5
NOTE: Figures report the average response time each month since July 2012, for three neighborhoods in San Francisco. Response
time is defined as the number of minutes between the time of request and the time at which the Uber vehicle arrived to pick up the
passenger. Neighborhood areas have been approximated using a geospatial bounding box. Data reflects completed trips only, for all
vehicle products (including uberX, uberPOOL, uberXL, UberSUV, and UberBLACK).
UberIMPACT
98%
98%
98%
98%
98%
98%
98%
98%
98%
98%
98%
98%
97%
97%
98%
97%
96%
98% - 100%
98%
98%
98%
98%
97% - 98%
99%
0% - 94%
98%
98%
96% - 97%
94% - 96%
98%
97%
98%
98%
98%
98%
98%
98%
98%
98%
98%
98%
NOTE: This map shows the percentage of total requests in each neighborhood that end in a completed trip, from the month
of April 2015, across all vehicle products (including uberX, uberPOOL, uberXL, UberSUV, and UberBLACK). A request
is considered completed if the user session that generated the request completes an Uber trip within an hour of the time of request.
10
UberIMPACT
The 2013 study mentioned above provides a rare opportunity to compare Ubers service directly to taxis,
albeit it only on weekends.7 In no studied zone of San Francisco did as many as half of taxi trips start within 15
minutes of request, and in the worst zone, the number was less than 20%. Only a handful of comparable Uber
trips start more than 15 minutes after the request in San Francisco, and essentially none starts in more than
30 minutes.
FREQUENCY
ZONE 1
ZONE 2
ZONE 3
ZONE 4
ZONE 5
TOTAL
TAXI
38%
42%
16%
19%
37%
32%
UBER
97.9%
98%
98.7%
98.7%
98.2%
98.1%
TAXI
26%
29%
26%
22%
37%
28%
UBER
<0.1%
<0.1%
<0.1%
<0.1%
<0.1%
<0.1%
15 MIN. SERVICE
The map below highlights the disparity in service levels between Uber and taxis in San Francisco by
demonstrating the average wait times in the zones reported in the 2013 study:
ZONE 2
2.05
ZONE 1
(in minutes).
2.19
< 2 MINUTES
2 - 2.5 MINUTES
ZONE 4
2.5 - 3 MINUTES
2.74
3 - 3.5 MINUTES
> 3.5 MINUTES
ZONE 3
3.29
ZONE 5
2.46
NOTE: This map and the preceding table report the average response time for each labeled zone area. Response time is defined as
the number of minutes between the time of request and the time at which the Uber vehicle arrived to pick up the passenger. Zone
areas represent combined Zip Code Tabulation Areas (ZCTAs), and match the same zones referenced in the 2013 taxi report (Fig. 2.1 on
page 2-3). Uber data reflects completed trips in April 2015, for all vehicle products (including uberX, uberPOOL, uberXL, UberSUV, and
UberBLACK), for weekends only. Taxi data is for weekends only as well.8
12
UberIMPACT
are able to compare the cost of real rides on the platform most easily using data from uberTAXI, Ubers taxi
Uber is completing
product. By comparing real taxi fares on uberTAXI to the computed fare had that ride been completed on uberX,
we can estimate that, on average, uberX is 30% less expensive than a taxi in San Francisco.9
uberX is more affordable and more available than taxis throughout San Francisco, particularly in areas that are
poorly served by taxis. Furthermore, Ubers software provides additional benefits to riders that are difficult
tens of millions of
to quantify. For example, the rating system and the ease with which riders can provide feedback (whether
positive or negative) provide high-frequency, actionable information to driver-partners that help keep their
service levels high. The platform records the path of every trip so that riders who suffer poor routing by driverpartners can request a refund based on an estimate of the proper fare. By storing identifying information and
location information for each driver-partner on each trip, the service maintains a high level of safety for both
riders and driver-partners.
Publicly available evidence suggests that taxis in San Francisco complete roughly 25,000,000 trips per year.10
Only five years in, Uber is completing trips at a higher rate than taxis, and taxis are still completing tens of
millions of trips in addition. Uber has brought for-hire transportation to people and communities who have
never had ready access to it before. San Franciscos transportation pie has never been larger.
13
UberIMPACT
trips in addition.
San Franciscos
transportation pie
has never been larger.
14
UberIMPACT
One of the strongest indications that the Uber platform provides a better economic opportunity for for-hire
drivers in San Francisco comes from a second 2013 report prepared on behalf of the SFMTA, which noted that
BY THE NUMBER S
taxi companies in San Francisco have had difficulty finding drivers for their shifts.11 Local drivers choose to
partner with Uber over other opportunities, like driving with taxi companies, because the platform provides
more opportunities to earn income in a flexible working environment, among other reasons. According to
a recent study jointly conducted by Alan Krueger, former Chairman of the Presidents Council of Economic
Advisors, and Jonathan Hall, Ubers Head of Policy Research, utilizing data provided by the survey experts at
Benenson Strategy Group, driver-partners reported that:
91%
The percentage of driver-partners
surveyed who cited earn[ing] more
income to better support myself or
my family as a major reason for
The most common reasons (combining major and minor reasons) [for joining the platform] were:
to earn more income to better support myself or my family (91 percent); to be my own boss and
set my own schedule (87 percent); to have more flexibility in my schedule and balance my work
with my life and family (85 percent); to help maintain a steady income because other sources of
income are unstable/unpredictable (74 percent).12
87%
The percentage of driver-partners
surveyed who cited be[ing] my own
boss and set[ting] my own schedule
Ubers platform is available for use by driver-partners at any time, and any driver utilizing the Uber platform
can choose exactly when and where to drive. Because there is no daily or weekly lease fee and no other fixed
payment of any kind, Uber driver-partners have no incentive to drive any more or less than they prefer. As
noted above, driver-partners report that this flexibility is a major contributor to their well-being and a factor
in their decision to partner with Uber.
In contrast, the standard taxi lease in San Francisco is a fixed ten hours and costs $106.25 up front. A taxi
85%
The percentage of driver-partners
surveyed who cited hav[ing] more
flexibility in my schedule and
balanc[ing] my work with my life
driver who wanted to take an hour off to pick up a child from school during a shift would pay dearly for that
opportunity, as fare intake would decline by 10% (about $30) while costs would decline only by a couple of
dollars for less fuel consumed and fewer credit card transactions completed. The $106.25 gate fee is constant
regardless of how many hours a taxi driver drives. To take a starker example of the difference in flexibility
between driving with Uber and driving a taxi, consider a for-hire driver who would like to drive for two hours
in between non-driving obligations. Driving with Uber, the driver-partner could expect to earn $50 in revenue
net of Ubers fees (2 * $25/hour). Driving a taxi, the driver would expect to take in $60 (2 * $30/hour) in fares,
but owe $106.25 in gate fees resulting in a net loss of $46.25 for the day.
The Uber platform also provides benefits to driver-partners over driving a taxi that are more difficult to
quantify than earning power and flexibility of schedule. Many taxi drivers depend on attendants to provide
dispatching services and fuel. Some of these attendants have been known to demand costly side payments or
tips (as they are referred to by the attendants and dispatchers) in violation of regulations before performing
critical tasks:
Drivers, especially those without medallions, face a parallel problem. Those who take their taxi
on a daily shift basis (gas-and-gate), often find they have to tip the dispatcher, the gas attendant,
and/or the cashier. For some, not tipping has consequences in the form of delayed issue of the
vehicle, or perhaps no vehicle at all. The payment of such gratuities is forbidden by regulation,
but it happens anyways.13
15
UberIMPACT
74%
The percentage of driver-partners
surveyed who cited to help maintain
a steady income because other
sources of income are unstable/
unpredictableas a major reason
for working with Uber.
$25
April 2015 average hourly income
35% of their daily fares.14 Total gross fares averaged roughly $300/day. 55% of that total is net to drivers, i.e.,
$165.15 For a standard ten hour shift, the average taxi drivers hourly income net of vehicle expenses was
approximately $16.50/hour (at the time this case study went to print it was not possible to verify whether or
16
UberIMPACT
in a cab or fails to pay for a ride. In contrast, driver-partners on the Uber platform take on no payment risk.
provides access
Payment is cashless and handled through the app. Ubers technology can also identify and track riders who are
rude, disrespectful, or commit crimes against driver-partners.
to flexible earning
opportunities to
At the national level, taxi drivers are the most likely professionals to be the victim of a crime, according
to statistics from the Occupational Safety and Health Administration in 2014.19 While we do not have
comparable statistics for Uber driver-partners, non-anonymous riders, trip paths recorded during rides,
and electronic payments serve to protect driver-partners from many of the crimes that are perpetrated against
taxi drivers.
Perhaps the best, most direct evidence for the value derived by driver-partners from the Uber platform is the
breadth and depth of the population that engages with the platform to drive. Tens of thousands of partners are
actively engaged with Uber every month in San Francisco, and tens of thousands more use the app across the
state. The Uber platform provides access to flexible earning opportunities to everyone who qualifies, and many
of Californias residents are choosing to partner with Uber over other earning opportunities.
17
UberIMPACT
18
UberIMPACT
Beyond improving transportation availability and affordability for individual riders and providing a desirable
platform for driver-partners, Uber has improved and will continue to improve the quality of life in the city of
San Francisco as a whole. Some of these second order benefits of Uber to the city of San Francisco include:
a reduction in the incidence of drunk driving, improved access to small and independent businesses, reduced
congestion and greenhouse gas emissions, and reduced need for the city to allocate valuable real estate to
parking under-used private cars.
At the end of the night, those leaving bars who otherwise might have driven drunk now have a reliable way
to get home that does not endanger themselves or innocent bystanders. The number of Uber trips go up
endanger themselves
or innocent bystanders.
suddenly when bars close, providing strong circumstantial evidence that riders rely on Uber to get home from
establishments that serve alcohol:
LAST CALL
TRIPS
REQUESTS
6PM
8PM
10PM
MIDNIGHT
2AM
4AM
6AM
This evidence is supported by research conducted at Temple University by Professors Brad N. Greenwood and
Sunil Wattal.20 The researchers estimate that Ubers entrance into various markets in California over the course
of several years caused an approximate 5% drop in alcohol-related driving fatalities. The authors show that
the effect builds over time as the network matures. Similarly, a report on which MADD and Uber collaborated
estimated a 6.5% decrease in alcohol-related crashes for those under the age of 30 in California as a result of
Ubers entrance to the market.21
19
UberIMPACT
INDEPENDENT BUSINESS
20
UberIMPACT
Pooling rides in a
realized. uberPOOL is a relatively new product on the Uber platform that allows riders traveling along a similar
route to share the cost of a ride. Pooled rides take up less road surface and require less fuel. Ubers network
can support a high match rate in dense urban cores, like San Franciscos.22 By combining rides in real time,
uberPOOL has the potential to reduce congestion and greenhouse gas emissions without the costly addition of
a single road or the costly replacement or upgrade of a single vehicle. Already, nearly half of all uberX rides in
San Francisco are uberPOOL trips. A 2013 MIT study of New York City taxi data suggested that pooling rides in
inconveniencing riders
a dense urban area could reduce the number of cars on the road by as much as 30%, without inconveniencing
minutes.
23
grow as well.
For many San Francisco residents, using a combination of mass transit and Ubers various offeringse.g.,
uberPOOL to commute, uberXL to get to the airport, and UberBLACK for a date at a fine restaurantis now more
affordable, convenient, and pleasant than owning and driving a private car.
22
UberIMPACT
Lowering the demand for parking and freeing up valuable urban real estate
Whereas most personal cars spend approximately 95% of their time parked on valuable land, most vehicles
operating on the Uber platform spend hours on the road each day providing useful service and generating
income for driver-partners.24 As more riders shift to using platforms such as Uber for mobility, the citys tens
of millions of square feet of parking spaces can be freed up to be put to better use than storing unused cars.25
Land in San Francisco is valued at almost $1,000 per square foot.26 Even if the citys parking spaces were only
100 square feet each (theyre typically more than that), they would represent $44 billion in value that could be
put to use serving residents in more productive ways.
PARKING GARAGES
STREET PARKING
24
UberIMPACT
Conclusion
In just five years, Uber has improved how both residents and tourists alike move around San Francisco, helping
to bring people, businesses, and neighborhoods closer together. Removing technological and practical barriers
that once stymied willing drivers from connecting with people who needed rides, Uber has had a significant
impact on the lives of riders, driver-partners, and the city as a whole. Riders finally have near-instant access
to rides throughout the entire city, at all times of day or night and at a fraction of the cost of a traditional taxi.
Driver-partners are earning additional income in a flexible setting, enabling them to balance other priorities in
their lives.
Perhaps the most exciting aspect of Ubers impact is that the access, affordability, and opportunity benefits
set out above are just the start. In the coming months and years, Ubers impact will grow and evolve as its
technology improves and its network expands.
As more riders and more drivers start using the platform, the distance between any given rider and the nearest
available car will continue to shrink. Because Ubers real-time system is able to intelligently match each rider
with the closest driver-partner, wait times will drop even further. The result is a far more efficient use of a citys
vehicle fleet and roads. City planners and architects will be able to imagine and create more parks and bike
lanes, and fewer parking lots. As the platforms technology develops even further, ever-increasing economies
of scale will provide yet more advantages. Some of them, while difficult to imagine today, will be breathtaking
and transformative for residents, tourists, and employers, but fundamentally for the health and growth of the
city itself. The best is yet to come.
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UberIMPACT
Notes
1
19
Cindy Perman, The best (and worst) jobs for 2014, CNBC, April 19, 2014,
available at: http://www.cnbc.com/id/101582641
Brad Greenwood and Sunil Wattal, Show Me the Way to Go Home: An Empirical
Hara Associates, Best Practices Studies of Taxi Regulation: Meter Rates & Gate
Investigation of Ride Sharing and Alcohol Related Motor Vehicle Homicide, Fox
School of Business Research Paper No. 15-054, 2015, available at: http://ssrn.
WebVersion%20MeterGate%2086%20FullDraft.pdf
com/abstract=2557612
21
MADD, New Report from MADD, Uber Reveals Ridesharing Services Important
Innovation to Reduce Drunk Driving, January 27, 2015, available at: http://www.
madd.org/media-center/press-releases/2015/new-report-from-madd-uber.html
http://www.sfmta.com/services/taxi-industry/medallions/medallion-holders
22
5
See the following MIT research for a proof-of-concept using publicly available
This is the median driver-partners number of completed trips per hour on uberX/
data from New York Citys yellow cabs: Paolo Santi et al. Taxi pooling in New
uberPOOL among driver-partners who drove for at least an hour per week
(though not each week) during the month of April 2015 in the San Francisco
Bay Area.
Pooling.pdf
23
Id.
24
Paul Barter, Cars are parked 95% of the time. Lets check! Reinventing Parking,
Id.
We deduct Ubers $1 fee on uberTAXI rides before comparing taxi fares to uberX
10
coastline/
supra note 2.
11
12
Jonathan Hall and Alan Krueger, An Analysis of the Labor Market for Ubers
Driver-Partners in the United States, Working Papers (Princeton University,
Industrial Relations Section), 2015, p 11, available at: http://arks.princeton.edu/
ark:/88435/dsp010z708z67d
13
14
15
The balance of the gate fee goes to fuel, phone, and credit card payment
processing costs.
This exercise is made complicated by the fact that different partners choose to
provide rides on different products (e.g., some partners have a high-capacity
vehicle that is cross-listed on uberX and uberPOOL, while another might have a
lower-capacity vehicle and, by chance, drive only in areas in which uberPOOL
is not available).
This is the median driver-partners hourly income for driver-partners on uberX/
uberPOOL who drove for at least an hour per week (though not each week)
during the month of April 2015 in San Francisco.
18
28
Aaron Bialick, Census: SF Has Enough Street Parking Spaces To Fill CAs
surge price into account for uberX trips. On average, uberX at the non-surged
17
25
fares. The 30% less expensive than a taxi figure takes the average weighted
Flywheel by average trip fares in taxis calculated from the Hara Associates report
16
cars-are-parked-95-of-time-lets-check.html
UberIMPACT
26