How Uber has transformed the on-demand economy
By facilitating a more convenient and on-demand form of transport and delivery, Uber helps save time, expand mobility, create new business for merchant-partners and the hospitality industry, and provide flexible earning opportunities for thousands of taxi driver-partners under their respective fleets (including MPT taxis and yellow taxis, collectively referred to as “taxi driver-partners”) and delivery-partners in Taiwan.
In 2021, Uber unlocked an estimated NT$129 billion in economic value for the Taiwanese economy. This includes both the impact of earnings of taxi driver-, delivery- and merchant-partners facilitated by Uber, and the wider indirect and induced multiplier effect created throughout the company's wider supply chain.
According to Taiwanese riders, taxi services are 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 this increased flexibility is worth an estimated NT$7 billion to driver- and delivery-partners.
The on-demand economy has helped make everyday life easier for Taiwanese people- saving time, increasing choice and improving mobility. For consumers, the primary reason for booking a taxi ride throughUber is convenience. Internet platforms like Uber have made it easier to travel from point A to point B;
93% of taxi riders say that convenience is an important reason they use Uber to book rides. In a normal year, we estimate that Uber saves riders over 8 million hours a year.
76% 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 produce NT$31 billion in consumer surplus for Taiwan.
Taxi Driver- and Delivery-Partners
Taxi driver- and delivery-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.
61% of taxi driver- and delivery-partners said they were satisfied with their experience using the Uber app. In total, in 2021, we estimate that driver-partners earn an additional NT$1.2 bn a year in higher income through Uber, or an average of 34% more than their next best alternative source of income or work.
90% of taxi 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 taxi driver- and delivery-partners choose to work with Uber. In total, in 2021 we estimate that this increased flexibility is worth an estimated NT$7 billion to taxi 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 restaurants.
82% of Uber Eats users agree that food delivery apps have made it easier to discover new restaurants, and 76% that they helped improve quality of life when they weren’t allowed to eat out.
In total, we estimate that in 2021 Uber Eats helped drive NT$10.3 billion in additional revenue to restaurant-partners in Taiwan.
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.
92% of female taxi riders say that safety is an important factor in their choice to use Uber to book taxi rides, and 70% of female taxi riders agree that it is now easier to get home late at night.
45% of taxi riders without access to a car said the availability of taxi booking services like Uber was important to their choice of not owning a vehicle.
In total, we estimate that 1 in 6 Uber trips connect with public transport.
How we use Uber Taxi
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 taxi services has become something many Taiwanese people increasingly rely on.
Uber plays a unique role in Taiwan’s taxi ecosystem. Uber provides lead generation services to taxi fleet/dispatchers, who dispatch requests to taxi driver-partners under their fleet through the Uber app. Uber works with these taxi fleet/dispatchers, leveraging our technology to provide a range of services that help improve the industry. In Taiwan, this includes both Multi-purpose Taxi (MPT) and Yellow Taxi (YT) driver-partners and vehicles.
In our nationally representative poll:
- Uber served over 1.8 million customers in Taiwan in 2019, the year prior to the coronavirus pandemic.
- There was 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 taxis save around 17 minutes per trip compared to the next best alternative. Building off this, we estimate that Uber taxis save riders over 8 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 (93%) came top, with other factors such as safety (91%) and reliability (91%) seen as more important than cost (78%).
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: convenient.
In your own words, why do you use Uber?
“Convenient and safe, more trustworthy than the average taxi.” Male customer, 46, from the Central Region
“It is easier to find an Uber late at night than a taxi, and the price is more transparent.” Male customer, 24, from the Northern Region
“Convenient and eco-friendly." Female customer, 30, from the Southern Region
“Late-night options, quick and direct access to the destination.” Female customer, 23, from the Southern Region
“Safer and cheaper than traditional taxis.” Female customer, 36, from the Northern Region
“Better quality than traditional taxis and good for use in a hurry.” Male customer, 28, from the Northern Region
“Convenient, and don't have to come into contact with too many people during the pandemic.” Female customer, 28, from the Southern Region
“Makes my life easy.” Male customer, 42, from the Southern Region
With restaurants’ dining rooms often shut in the last couple of years, Taiwanese consumers have increasingly turned to food delivery platforms such as Uber Eats to keep accessing a wide variety of good quality food locally. Around four-fifths (80%) of food delivery app users say that on average they order using a food delivery app at least once a month, and 73% 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 (49%) to just being tired of cooking or doing the dishes (31%).
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, safety and reliability enabled by Uber 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 app for the next month.
In total, in 2021 we estimate that rides through Uber are producing NT$7 billion in consumer surplus for Taiwanese riders, while Uber Eats is producing another NT$24 billion in consumer surplus. Together, that’s the equivalent of 0.15% of GDP.
Taxi Driver- and Delivery-Partners
Taxi driver- and delivery-partners are highly satisfied with the experience of using Uber
In our survey:
In total, in 2021, we estimate that taxi driver-partners earn an additional NT1.2bn a year in higher income through Uber, or an average of 34% more than their next best alternative.
When we asked taxi driver- and delivery-partners what were important reasons they chose to drive or deliver through the Uber app, the most popular answers were wanting more schedule flexibility, enjoying driving, and the ability to interact with riders, customers or restaurant-partners.
If they weren’t driving through Uber, the majority say they would look for another, similar taxi driving or delivery role. Just 19% 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 taxi driver- and delivery-partners what they most liked about using Uber to drive, time was the leading response, followed closely by flexibility.
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 taxi driver- and delivery-partners. Many taxi driver- and delivery-partners balance their time on the Uber app with jobs, platform work, education or caring responsibilities. In our driver-partner survey, 90% of taxi 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 taxi driver- and delivery-partners choose to work with Uber. Only a minority said that using Uber was their only source of income.
In order to test its importance, we asked taxi 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-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 NT $7 billion to driver- and delivery-partners.
Flexibility matters for many reasons. 56% of taxi driver- and delivery-partners say that they earn income from other sources, as well as via the Uber app - 32% have a traditional full-time job too - and it is only a small minority of taxi 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:
- 77% 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.
- 79% 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.
“I love driving, and Uber is a platform that allows me to do what I like, time elasticity, income elasticity, which suits me, and I want to see new people and things through Uber, and then go to many places and maintain a good income, and thank everyone on the platform for letting me have such a good job” Male driver-partner, 27, from Southern Taiwan
“There is a feeling of service to people” Male driver-partner, 45, from Northern Taiwan
“Flexible working hours, flexible use of time to take care of parents, earn a salary from my own labor, and take care of my family, so I like to deliver food to Uber” Male driver-partner, 53, from Northern Taiwan
“Flexible use of idle time and earn some living expenses.” Female driver-partner, 36, Northern Taiwan
“I like it before I officially retire. Being able to do a job that is as flexible as I am now and whose income allows me to maintain the normal financial expenses of my family” Male driver-partner, 65, from Northern Taiwan
“Flexible working hours allow you to freely decide when to go online” Male driver-partner, 52, from Southern Taiwan
“Provides convenience and income to people who want part-time jobs, thank you!” Male driver-partner, 25, from Central Taiwan
“You’re the owner of your own time. I also enjoy driving, cycling, and observing the scenery while driving.” Female driver-partner, 25, from Southern Taiwan
Restaurant- and Merchant-Partners
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:
73% 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 NT$10.3 billion in additional value for restaurant- and merchant-partners in Taiwan- and a gross impact of NT$123 billion for the Taiwanese economy as a whole.
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, 45% of women under 35 said they generally feel unsafe travelling home at night. Before the Uber app, 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 the Uber app 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 (54%) 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.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, 45% of riders without access to a car said the availability platforms like Uber was important to their choice of not owning a vehicle.
Almost nobody relies exclusively on taxi booking 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 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 NT$X?”
The price offered was randomised between NT$1.25, NT$2.50, NT$5, NT$10, NT$20, NT$50, NT$100, NT$200, and NT$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- and delivery-partner payouts and the number of driver- and delivery-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?”
Value of Flexibility
As part of the driver-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-partner surplus per user, averaging the results of the two models. This model was conditional on both driver-partner type (rideshare- or delivery-partner) and location. This was then scaled up to a national level and regional level by data provided by Uber on driver-partner numbers.
Impact on Restaurant- and Merchant-Partners
The model utilises Uber’s internal data on the total payout to restaurant- and merchant-partners via Uber Eats. For restaurants 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 mid-point 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 restaurants and merchants for Taiwan. 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-partner payouts.
- Indirect and induced impact of driver-partner spending on vehicles.
- Induced impact of additional driver-partner income.
- Indirect and induced impact of restaurant-partner spending via Uber Eats.
This measure is a gross estimate, looking at the total amount of economic activity supported by Uber in Taiwan. 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.
- 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