How Uber has transformed the on-demand economy
Executive Summary
Economy
Uber is a technology platform that enables independent driver partners to provide rideshare services to riders, and restaurants to offer their food through a network of independent delivery partners.
Uber’s technology helps save time, expand mobility, create new business for local restaurants and other merchants, and provide flexible earning opportunities for thousands of driver partners and delivery partners in Australia.
In 2021, Uber created an estimated $10.4 billion in economic value for the Australian economy. This includes both the impact of earnings of driver, delivery person and restaurant partners facilitated by Uber and Uber Eats, and the wider indirect and induced multiplier effect created throughout the company's wider supply chain.
In total, we estimate that in 2021 Uber Eats by itself created $889 million in additional value for restaurants in Australia - and a gross impact of $8.4 billion for the Australian economy as a whole.
According to Australian riders, ridesharing is the most significant transport innovation they have experienced in the last decade, and more impactful to them than any new transportation infrastructure project.
In total, in 2021 we estimate that the increased flexibility created by Uber’s platform is worth an estimated $400 million to driver and delivery partners.
Consumers
The on-demand economy has helped make everyday life easier for Australians - saving time, increasing choice and improving mobility. For consumers, the primary reason for using the Uber and Uber Eats apps is convenience. Ridesharing platforms like Uber have made it easier to travel from point A to point B and it’s never been easier to order from local merchants with food delivery platforms like Uber Eats;
90% of riders say that convenience is an important reason they use the Uber app. In a normal year, we estimate that Uber saves riders over 40 million hours a year.
40% of Uber Eats users agree that food delivery apps have helped to improve quality of life during the last year while eating out is restricted.
In 2021, we estimate that Uber and Uber Eats produced $6.6 billion in consumer surplus for Australians.
Driver and delivery partners
Driver and delivery partners overwhelmingly choose to use the Uber driver app because of the flexibility it provides, and the ability to control their own hours. The vast majority report being highly satisfied with their experience, and that Uber and Uber Eats have helped them earn more.
67% of driver and delivery partners said they were satisfied with their experience using the Uber driver app. In total, in 2021, we estimate that driver and delivery partners make an additional $456 million a year in earnings through Uber, or an average of 6% more, than their next best alternative source of income or work.
89% of driver and delivery partners say that schedule flexibility is important to them when looking for work, and on average flexibility was a more important factor than earnings in why driver and delivery partners choose to work with Uber and Uber Eats. In total, in 2021 we estimate that this increased flexibility is worth an estimated $400 million to driver and delivery partners.
Restaurant and Merchant Partners
Food delivery platforms like Uber Eats have made it easier to access a wide range of good quality food, or access groceries when you can’t leave the house. During the last two years, Uber Eats has helped provide a vital revenue channel to restaurant partners.
79% of Uber Eats users agree that food delivery apps have made it easier to discover new restaurants, and 40% that they helped improve quality of life when they weren’t allowed to eat out.
Research by AlphaBeta, prior to the COVID-19 pandemic, suggests that around $7 in every $10 spent on delivery apps in Australia is incremental in the sense that it would not otherwise have been spent in a restaurant. In total, we estimate that in 2021 Uber Eats helped drive $889 million in additional revenue to restaurant partners in Australia - and a gross impact of $8.4 billion for the Australian economy as a whole.
Communities
Uber helps provide a safer way to get home late at night, and helps complement public transport by filling in the gaps it can’t reach.
89% of female riders say that safety is an important factor in their choice to use the Uber app, and 69% of female riders agree that it is now easier to get home late at night.
65% of riders without access to a car said the availability of ridesharing platforms like Uber was important to their choice of not owning a vehicle.
In total, we estimate that 1 in 11 trips taken with Uber connect with public transport.
Consumers
How we use Uber
Over the last decade, Uber has increasingly become a part of everyday life. From getting home from a restaurant to travelling between meetings, to being there in an emergency, the availability of a convenient ridesharing platform has become something many Australians increasingly rely on.
In our nationally representative poll:
- 40% of the respondents - representing some 7 million Australians - said that they had used Uber app in the last 2 years, rising to around 60% for those were aged under 35
- There was no significant difference in gender in how likely someone was to use Uber
Uber is being widely used to help us get to and from friends and family, eating out and entertainment.
But it is not just being used for leisure. We also found that Uber is being widely used to help with work, everyday chores and childcare.
And Uber’s platform is an important option for when you really need to get somewhere fast or on time. On average, riders say Uber saves around 18 minutes per trip compared to the next best alternative. Building off this, we estimate that Uber saves riders over 40 million hours in a normal year.
Why do riders choose Uber?
When we asked riders about the most important reasons why they used Uber, convenience (90%) and reliability (90%) came top, with other factors such as safety (86%) and comfort (81%) seen as just as important as cost (88%).
Which factors tend to be important or unimportant in why you choose to use Uber?
Even more striking, however, was when we asked as part of the survey for riders and consumers to write in their own words why they use the service - and one answer came back far more than others: convenience.
In your own words, why do you use Uber/Uber Eats?
Why do you use Uber? 1
“It makes my busy life as a mum so much easier; one less effort in my life” Female, 28, Queensland
“When I might be having a bad day mentally, or I'm rushing around because I'm running really late, Uber is great to rely on to magically make it to my appointment online!” Female, 27, Victoria
“Because it is convenient, easy to organise, no payment after completion of ride, and it just works well.” Male, 70, South Australia
“Convenience - having someone "reliable" to collect me when I can not drive myself home.” Female, 39, Queensland
“Because it's quicker and with a toddler she gets frustrated with travelling for long periods of time” Female, 31, Queensland
“Uber is a trusted brand, brings good customer service, and is convenient to me.” Male, 29, Western Australia
“I use Uber as I feel safer when travelling with them than other travel services. I use them to travel to and from social outings or to travel to work.” Female, 24, New South Wales
Uber Eats
With restaurants’ dining rooms often shut over the last couple of years, Australian consumers have increasingly turned to food delivery platforms such as Uber Eats to keep accessing a wide variety of good quality food locally. Around a third (36%) of food delivery app users say that on average they order using a food delivery app at least once a month, and 40% agree that they’ve helped to improve quality of life while eating out isn’t allowed.
When we asked what the most important reasons Uber Eats users used food delivery apps were, they pointed to reasons from quick delivery times (38%) to just being tired of cooking or doing the dishes (34%).
Which of the following, if any, are important reasons why you order using food delivery apps? Please select all that apply.
How much value does Uber create for consumers?
How much is the increased convenience and reliability enabled by Uber and Uber Eats worth to riders and consumers?
One of the most important measures of economic welfare is the consumer surplus - the amount you would have to pay someone for them to voluntarily give a good or service up. If a good has a zero consumer surplus, that implies we can take or leave it - whereas goods with a high consumer surplus are playing an important role in our lives.
As part of their poll, we asked riders and consumers how much they would have to be compensated to lose access to the Uber and Uber Eats apps for the next month.
In total, in 2021 we estimate that rides with Uber are producing $3.4 billion in consumer surplus for Australian riders, while Uber Eats is producing another $3.2 billion in consumer surplus. Together, that’s the equivalent of 0.35% of GDP.
Driver and Delivery Partners
Driver and delivery partners are highly satisfied with the experience of using Uber
In our survey:
In total, in 2021, we estimate that driver and delivery partners make an additional $456 million a year in earnings through Uber, or an average of 6% more than their next best alternative.
When we asked driver and delivery partners what were important reasons they chose to drive or deliver through the Uber driver app, the most popular answers were wanting more schedule flexibility, enjoyed driving, and the ability to interact with riders, customers or restaurant partners.
If they weren’t driving with Uber, the majority say they would look for another, similar driving or delivery role. Just 22% say that they would look for a traditional full-time job as a replacement, while:
The Importance of Access to Flexible Work
When we asked driver and delivery partners what they most liked about using Uber’s platform to drive or deliver, flexibility was by far the leading response.
In your own words, what do you like most about driving for Uber?
The ability to choose your own hours is often particularly important to driver and delivery partners. Many driver and delivery partners balance their time on the Uber app with jobs, platform work, education or caring responsibilities. In our driver and delivery partners survey, 89% of driver and delivery partners say that schedule flexibility is important to them when looking for work, and on average flexibility was a more important factor than earnings in why driver and delivery partners choose to drive or deliver using Uber. Only a minority said that using Uber was their only source of earnings.
In order to test its importance, we asked driver and delivery partners whether they would prefer a hypothetical situation in which they received higher earnings, but had to work fixed hours. A majority of driver and delivery partners said that they would rather retain the right to choose their own hours, even if the alternative was a 20% increase in earnings. In total, in 2021 we estimate that this increased flexibility is worth $400 million to driver and delivery partners.
Flexibility matters for many reasons. 59% of driver and delivery partners say that they earn from other sources, as well as via the Uber app - 19% have a traditional full-time job too - and it is only a small minority of driver and delivery partners who use the platform more than 40 hours a week.
Flexibility can be particularly important for those with other caring responsibilities for children, elderly relatives or others who need support:
- 87% of those with children aged 18 or under or caring responsibilities said that the flexibility provided by app-based work made it easier to balance family and work responsibilities.
- Overall 82% of those with children aged 18 or under or caring responsibilities said that working via the Uber platform provides them with significantly more flexibility than their past jobs.
What do you like most about driving with Uber? 2
“The flexibility in working the hours I want and the option provided as there were limited options for me after losing my previous job.” Male driver partner, 39, from New South Wales
“I am a better driver as a result and know my way around the city as a result of driving frequently around.” Male driver partner, 29, from New South Wales
“I like to be on the road driving and delivering, meeting and interacting with people, love the comments that the customers give sometimes after the delivery. Overall a new experience and a good one on that” Male driver partner, 47, from Queensland
“Flexibility to choose my own hours when my son is at school. There's not many options out there and it has helped me financially.” Female driver partner, 35, from Queensland
“Meeting new people. I live in a special part of Australia and I like to give tourists tips on what to see. Flexibility of work and interacting with my customers.” Male driver partner, 59, from the Northern Territory
Restaurants and Merchants
By making it more convenient to order from a wide range of restaurants, food delivery apps have significantly increased the amount of everyday groceries customers order for delivery:
65% of Uber Eats users say that the availability of food delivery apps has significantly increased the amount of food they order. An independent estimate from prior to the COVID-19 pandemic found that the availability of food delivery services can increase restaurant sales by 30-50%.3
In total, we estimate that in 2021 Uber Eats by itself created $889 million in additional value for restaurants in Australia - and a gross impact of $8.4 billion for the Australian economy as a whole.
Communities
Keeping communities safe
After they have enjoyed a good evening out, many people can be anxious about travelling home in the dark. In our polling, 31% of women under 25 said they generally feel unsafe travelling home at night. Before ridesharing, it could be difficult, if not impossible, to find a taxi at the end of a night out - and taking public transport could require a long walk in the dark to your front door, or waiting alone at a bus stop.
Independent academic research has found that having Uber available in a city reduces drunk driving, traffic accidents, and the number of arrests for physical and sexual assault.4 In our polling, over half of female riders (57%) agreed that Uber is often the safest way for them to travel home.
Sustainability
Decarbonizing transport is one of the most important steps for countries to achieve net zero emissions, with the sector responsible for around a fifth of global CO2 emissions.5 Cities are concentrated sites of carbon emissions, accounting for ~70% of all emissions globally.
Technologies such as ridesharing can help fill in any gaps in the services offered by public transit, making it easier to get around and reducing the need to own your own car. In our polling, 65% of riders without access to a car said the availability of ridesharing platforms like Uber was important to their choice of not owning a vehicle.
Almost nobody relies exclusively on ridesharing services to travel around an area - instead they form an important complement for public transport, covering those journeys for which other modes of transport would be unsafe, inconvenient or take too long.
Appendix - Methodology
Consumer Surplus
Following the methodology of Brynjolfsson, Collis and Eggers (2019), we asked riders and Uber Eats users a single discrete binary choice question in the form:
“Now imagine you had to choose between the following options. Would you prefer to keep access to [Uber for rideshare/Uber Eats] or go without access to [Uber for rideshare/Uber Eats] for one month and get paid $X?”
The price offered was randomised between $1.25, $2.50, $5, $10, $20, $50, $100, $200, and $500.
We then computed both a linear and logarithmic regression of the results of this poll to derive a demand curve and the total consumer surplus per user, taking the average as the headline measure.
Time Saved
As part of our polling, we asked riders for the duration of their most recent trip taken with the Uber app, and how long the next best alternative would have taken. We then used the difference to estimate time saved per trip, multiplying by Uber provided data on total number of annual trips by region to estimate total time saved per year. We then calculated the monetary value of this using average hourly salary.
Gross Increase in Driver and Delivery Partner Earnings
Gross Driver and Delivery Partner Earnings is calculated from proprietary data provided by Uber and Uber Eats on total driver and delivery partner earnings and the number of driver and delivery people partnering with Uber and Uber Eats by region.
Increase in Earnings (%) is taken from the driver and delivery partner survey, and the average response to:
“If Uber did not exist, how much do you think you would be likely to earn per week in your next best alternative?”
Value of Flexibility
As part of the driver and delivery partner survey, we asked the following single discrete binary choice question:
“Imagine you had to choose between one of the following two options:
- Fixed schedule but MORE consistent weekly earnings at X% [lower/higher] level than you do now
- Flexibility to choose your own hours, but earning only the same amount per hour that you do now
Which would you choose?”
X was randomised between 5%, 10%, and 20%. We then used a probit and logit regression to derive a demand curve, and the total driver and delivery partner surplus per user, averaging the results of the two models. This model was conditional on both driver partner type (rideshare or delivery person) and location. This was then scaled up to a national level and regional level by data provided by Uber and Uber Eats on driver and delivery partner numbers.
Impact on Restaurants and Merchant Partners
The model utilises Uber Eats’ internal data on the total payout to restaurants and merchant partners via Uber Eats For restaurant partners we estimate the proportion that is additional using the average of:
- The self-reported estimate from the consumer polling of how much spend is additional, and would not have been ordered if food delivery apps did not exist.
- The midpoint of Collison (2020)’s estimated range of the proportion of dollars spent on food delivery apps that are incremental.6
Following standard input-output methodology, we used the latest OECD detailed multipliers , to calculate Type 1 and Type 2 output multipliers for restaurant and merchant partners for Australia. These multipliers are used to show the total impact via restaurant and merchant partners that Uber Eats has on the economy.
Total Economic Impact
Total economic impact is calculated as the sum of:
- Driver and delivery partner earnings.
- Indirect and induced impact of driver partner spending on vehicles.
- Induced impact of additional driver partner earnings.
- Indirect and induced impact of restaurant spending via Uber Eats.
This measure is a gross estimate, looking at the total amount of economic activity supported by Uber and Uber Eats in Australia. It does not attempt to measure what would happen in a hypothetical where Uber and Uber Eats no longer existed. Our modelling does not include the impact of Uber's and Uber Eats’ direct investment or employment footprint as a company, or any spillover effect this has to the wider tech ecosystem.
Frequently Asked Questions
About the Report
- New nationally representative polls of approximately 1,000 consumers in each country, run by Public First.
- A new survey of driver and delivery people for each country, reaching over 7,000 drivers and delivery people in total. While Uber invited drivers and delivery people to complete the survey, the actual data was hosted by Public First, with individual level data kept anonymous and not shared back with Uber.
- Internal data provided by Uber on the number of drivers, driver payouts, restaurant/merchant payouts, and hours worked in each country.
Measuring Uber’s Economic Impact
- Payments to drivers, delivery people and restaurants
- Indirect and induced impact of driver and delivery person spending on vehicles (eg estimated car rental, insurance, fuel, running costs etc)
- Induced impact of additional driver and delivery person income
- Indirect and induced impact of restaurant spending via Uber Eats
We do not include the impact of any direct investment from Uber in each territory (eg its offices, employees etc).
The aim of GVA is to try and take account of the additional value created by a company and organisation - the value added - on top of the value of the raw materials and inputs it takes in.
- The indirect impact looks at the impact of an organisation’s procurement and supply chain - in this case, for example, driver spending on vehicles or restaurant spending on food and kitchen supplies.
- The induced impact looks at the impact of the wages of a business and its supply chains employees, and how their spending supports other businesses. In this case, we are looking at the impact of spending of drivers and delivery people, as well as the wider supply chain.
Other Estimates in the Report
In order to do this, we took the data Uber provided us on the total level of payouts for restaurants and merchants per territory, and then estimated the proportion that was additional based on averaging two sources:
- The average self-reported proportion from this question in our polling in each country: In your experience, how has the availability of food delivery apps affected the amount of food you order for delivery?
- The incremental spend for restaurants calculated in Collison (2020)
“If Uber did not exist, how much do you think you would be likely to earn per week in your next best alternative?”
“Imagine you had to choose between one of the following two options:
- Fixed schedule but MORE consistent weekly earnings at X% [lower/higher] level than you do now
- Flexibility to choose your own hours, but earning only the same amount per hour that you do now
One way to think of this is that most goods in the market charge the same price to all or a group of customers - but they are not likely to create equal amounts of value. The price you pay for something is likely to be at least equal to the minimum value it creates for you - or you would not have chosen to buy it - but there is no reason the value it creates can not be significantly more than this. By totalling the surplus consumer value, we produce a measure called the consumer surplus.
Following the methodology of Brynjolfsson, Collis and Eggers (2019), we asked riders and Uber Eats users a single discrete binary choice question in the form:
“Now imagine you had to choose between the following options. Would you prefer to keep access to [Uber for rideshare/Uber Eats] or go without access to [Uber for rideshare/Uber Eats] for one month and get paid $X?”
The price offered was randomised between $1.25, $2.50, $5, $10, $20, $50, $100, $200, and $500, or a local equivalent with similarly valued price points.
We then computed both a linear and logarithmic regression of the results of this poll to derive a demand curve and the total consumer surplus per user, taking the average as the headline measure.
We then used the difference to estimate time saved per trip, multiplying by Uber provided data on total number of annual trips by region to estimate total time saved per year.
- Quotes have been edited for spelling and grammar, but are otherwise unchanged.
- Quotes have been edited for spelling and grammar, but are otherwise unchanged.
- The Impact of Online Food Delivery Services on Restaurant Sales, Jack Collison, 2020, https://web.stanford.edu/~leinav/teaching/Collison.pdf
- Driving Safety : An Empirical Analysis of Ridesharing’s Impact on Drunk Driving and Alcohol-Related Crime, Frank Martin-Buck, 2016, https://pdfs.semanticscholar.org/3f1e/b273fcee888441147105882dd12ca811fd35.pdf; Ride-Sharing, Fatal Crashes, and Crime, Angela K. Dills and Sean E. Mullholland, 2016, https://onlinelibrary.wiley.com/doi/abs/10.1002/soej.12255; Assessing the Impact of Ridesharing Services on Public Health and Safety Outcomes, Marlon Graf, 2017, https://milkeninstitute.org/sites/default/files/reports-pdf/110117-Ridesharing-and-Public-Health.pdf; Rideshare Utilization Decreases Motor Vehicle Trauma and Impaired Driving, Christopher R Conner, Ryan S Kitagawa, Samantha Parker, 2020, https://academic.oup.com/neurosurgery/article/67/Supplement_1/nyaa447_101/5982419
- https://ourworldindata.org/co2-emissions-from-transport
- https://web.stanford.edu/~leinav/teaching/Collison.pdf