How Uber has transformed the on-demand economy
By facilitating a more convenient and on-demand form of transport, Uber helps save time, expand mobility, and provide flexible earning opportunities for thousands of driver-partners in India.
In 2021, Uber unlocked an estimated ₹446 billion in economic value for the Indian economy. This includes both the impact of earnings of driver-partners and the wider indirect and induced multiplier effect created throughout the company's wider supply chain.
According to Indian 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.
The on-demand economy has helped make everyday life easier for Indians - saving time, increasing choice, and improving mobility. For riders, the primary reason for using Uber is convenience. Ridesharing platforms like Uber have made it easier to travel from point A to point B.
96% of riders say that convenience is an important reason they use Uber. In a normal year, we estimate that Uber saves riders over 168 million hours a year.
In 2021, we estimate that ridesharing with Uber produced ₹1.5 trillion in consumer surplus for Indians.
Driver-partners overwhelmingly choose to use the Uber 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 has helped them earn additional income.
In total, in 2021, we estimate that driver-partners earn an additional ₹17 bn a year in higher income through Uber, or an average of 49% more than their next best alternative source of income or work.
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.
97% of female riders say that safety is an important factor in their choice to use Uber, and 76% of female riders agree that it is now easier to get home late at night.
84% of riders without access to a car said the availability of ridesharing services like Uber was important to their choice of not owning a vehicle.
In total, we estimate that 1 in 4 Uber trips connect with public transport.
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, helping carry heavy items to being there in an emergency, the availability of convenient, safe ridesharing services has become something many Indians increasingly rely on.
- Uber served 33 million customers in India in 2019, the year prior to the coronavirus pandemic. In our nationally representative poll no significant difference in gender in how likely someone was to use the Uber app
Outside the pandemic period in a more normal year, 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 is an important option for when you really need to get somewhere fast or on time. On average, riders say Uber saves around 17 minutes per trip compared to the next best alternative. Building off this, we estimate that Uber saves riders over 168 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 (97%) came top, with other factors such as safety (96%) and time saved (96%) seen as just as important as privacy (95%), reliability (95%) and comfort (95%).
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 to write in their own words why they use the service - and one answer came back far more than others: safety.
In your own words, why do you use Uber?
“It is very easy to access. My residence is a little bit away from central locality and hence if I arrange an Uber, it would be very safe and economical. During peak hours and late evenings, Uber is ideal and safe because your journeys are tracked.” Male customer, 69, from South India
“I use Uber to get to places quickly when I don't have my own vehicle. Uber is quick and efficient” Female customer, 28, from South India
“There's always vehicles available at the time I want, and they ensure their drivers are safe and reputable.” Male customer, 47, from South India
“I typically get where I am going faster or cheaper than they would by taxis. Uber now requires all prospective drivers to submit to motor vehicle and criminal background checks. Partygoers can rely on being able to find available Uber drivers through their apps late at night. The combination of Uber and expanding online grocery delivery is making it more practical to live without a car.” Female customer, 23, from Central India
“Uber is my first choice of transportation because it makes my commute very convenient and takes care of hassles like driving and parking.” Male customer, 28, from Western India
“Uber is very safe, and it allows me to travel safely during the Coronavirus pandemic, when compared to public transport. It also saves me travel time.” Male customer, 26, from South India
How much value does Uber create for riders?
How much is the increased convenience, safety and reliability enabled by Uber worth to riders?
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 how much they would have to be compensated to lose access to the Uber app for the next month.
In total, in 2021 we estimate that rides with Uber are producing ₹1.5 trillion in consumer surplus for Indian riders. That’s the equivalent of 0.8% of GDP.
Drivers can earn significant additional income through Uber
In total, in 2021, we estimate that driver-partners earn an additional ₹17 bn a year in higher income through Uber, or an average of 49% more than their next best alternative type of work.
If they weren’t driving with Uber, the majority say they would look for another, similar driving role. Just 21% say that they would look for a traditional full-time job as a replacement, while:
In your own words, what do you like most about driving for Uber?
“Flexibility of my work schedule.”
“Uber is the best platform to earn money for a driver partner.”
“Uber's flexibility makes it easier to balance family and work.”
“Uber is the best platform for income.”
“I am my own boss.”
“Part-time income and flexible income.”
“The Uber platform is one of the best for convenience and flexibility. I am happy with it.”
“Meeting with different types of people and exploring new places.”
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, 28% of women under 35 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.3 In our polling, over four-fifths of riders (82%) agreed that Uber is often the safest way for them to travel home.
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.4
While ridesharing increases overall mobility, this does not need to come at the expense of worsened sustainability:
- Because of Uber’s on-demand nature, Uber achieves much higher utilization rates than taxis, reducing the amount of time driving without transporting riders.5
- The Company has committed to become a zero emissions global platform by 2040.
- For riders, the availability and reliability of Uber makes it possible to replace a driving trip with a multi-modal trip, combining public transport and rides with Uber - and for a number of riders to go without owning a car altogether.
Technologies such as ridesharing, carpooling and electric bikes are making it easier to get around, and reducing the burden of congestion. In our polling, 84% of riders without access to a car said the availability of ridesharing services 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
Following the methodology of Brynjolfsson, Collis and Eggers (2019), we asked riders 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] or go without access to [Uber for rideshare] 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.
As part of our polling, we asked riders for the duration of their most recent trip with Uber, 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-Partner Income
Gross Driver-Partner Income is calculated from proprietary data provided by Uber on total driver-partner payouts and the number of driver-partners partnering with Uber by region.
Increase in Income (%) is taken from the driver-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?”
Total Economic Impact
Total economic impact is calculated as the sum of:
- Driver-partner payouts.
- Indirect and induced impact of driver-partner spending on vehicles.
- Induced impact of additional driver-partner income.
This measure is a gross estimate, looking at the total amount of economic activity supported by Uber in India. It does not attempt to measure what would happen in a hypothetical where Uber no longer existed. Our modelling does not include the impact of Uber's direct investment or employment footprint as a company, or any spillover effect this has to the wider tech ecosystem.
Frequently Asked Questions
- Quotes have been edited for spelling and grammar, but are otherwise unchanged.
- Quotes have been edited for spelling and grammar, but are otherwise unchanged.
- 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
- Disruptive Change in the Taxi Business: The Case of Uber, Judd Cramer & Alan B. Krueger, 2016, https://www.nber.org/system/files/working_papers/w22083/w22083.pdf