Ride-Hailing Apps Such as Uber and Lyft – Top 3 Pros and Cons
The Uber app tracks the driver’s approach after a ride is ordered.
Source: Nicolas Vega, “Uber Now Offers Carpooling Discounts in Outer NYC Boroughs,” nypost.com, Oct. 25, 2018
While 66% of Americans have heard of ride-hailing companies such as Uber and Lyft, just 15% say they have used the services (21% in major cities). [1][2] Before app-based ride-hailing companies came along, riders would wave down taxis on the street or call a central dispatch for taxi service. [1]
Taxis are still used by more riders in suburban and rural areas, while ride-hailing dominates population-dense cities. [3] Uber officially overtook yellow cabs in New York City in July 2017, when it reported an average of 289,000 trips per day compared to 277,000 taxi rides. [4] More than 2.61 billion ride-hailing trips were taken in 2017, a 37% increase over the 1.90 billion trips in 2016. [3]
Are Ride-Hailing Companies Such as Uber and Lyft an Overall Benefit to Society?
Pro 1
Ride-hailing apps offer a convenient, safe, and affordable transportation option that is especially useful to take drunk drivers off the road.
A full third of ride-hailing passengers who own vehicles (33%) said the main reason they use the service is to avoid drunk driving. [5] Fatal alcohol-related car accidents dropped between 10% and 11.4% after the introduction of ride-hailing services; DUIs went down as much as 9.2% in some cities. [6] Researchers estimate that if ride-hailing were fully implemented across the country, the resulting drop in DUI-related accidents could save 500 lives and $1.3 billion in American taxpayer money annually. [7]
The technology used by ride-hailing companies increases reliability and decreases wait times for consumers, and can offer a 20% to 30% discount over the cost of a taxi. [2][7]These apps have built-in safety features, such as displaying the license plate and car model to ensure that riders get into the correct vehicle, the ability to share the route with friends and family, GPS tracking, cash-free transactions, and driver ratings. [8]
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Pro 2
Ride-hailing companies create jobs and boost the economy.
There are more than two million Uber and Lyft drivers in the United States. [11] Uber reported $12.9 billion in 2017 take-home gross revenue for its US drivers. [12] Drivers have flexibility to set their own hours, a benefit that 80% cite as important to them; nearly one in four (23%) were unemployed prior to becoming a driver. [12] 63% of drivers work behind the wheel fewer than 20 hours per week, using the job to supplement their incomes and pay bills. [13]
The Economic Development Research Group found that Uber contributed $17 billion in gross domestic product to the US economy, as well as $580 million in added business productivity and $11 million in additional spending by international visitors who use ride-hailing to travel to more locations than they otherwise would have. [13]
Lyft reported that its drivers earned more than $3.6 billion in 2017, and that passengers contributed an additional $2 billion of spending in their communities. [14] 54% of riders say they explore their cities more and 45% spend more at local businesses because of ride-hailing. [14]
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Pro 3
Ride-hailing increases mobility for seniors, people with disabilities, and low-income populations, and decreases discrimination experienced with taxis.
Ride-hailing initiatives such as uberASSIST, which offers door-to-door assistance, create an opportunity to serve the estimated 26 million US seniors who rely on others for transportation. [22][23] Uber and Lyft partner with senior organizations, retirement homes, and healthcare providers to arrange rides for seniors who aren’t comfortable using technology. [24] Some ride-hailing companies, such as Mobility 4 All and Lift Hero, have specially trained drivers and exist specifically to offer transportation options for seniors and people with disabilities. [25][26]
Lyft offers discounted rides to grocery stores for low-income households to increase access to healthy food options such as fresh fruits and veggies, and has also pledged $1.5 million to transport veterans and people with low incomes to medical appointments and job interviews. [27][28]
Researchers have noted high levels of discrimination in taxi service towards black riders, who have a 73% higher chance of having their taxi canceled and wait 6-15 minutes longer than white riders. [29] Anne Brown, PhD, Assistant Professor of Planning, Public Policy, and Management at the University of Oregon, found that “ridehail services nearly eliminate the racial-ethnic differences in service quality.” [29]
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Con 1
Ride-hailing services increase traffic congestion, emissions, and total vehicle miles traveled.
Ride-hailing adds a total of 5.7 billion miles of driving each year in the nine metropolitan areas (Boston, Chicago, Los Angeles, Miami, New York, Philadelphia, San Francisco, Seattle and DC) that account for 70% of such trips in the United States. [3] At least 40% of the time, drivers are traveling without passengers in the car, adding more miles and vehicle emissions that wouldn’t exist without ride-hailing. [3][2] As many as 60% of riders would have used public transit, walked, biked, or not taken a trip at all if ride-hailing wasn’t an option. [9] That means that nearly two-thirds of ride-hailing trips added additional cars to the roads. [10]
Studies show that ride-hailing makes traffic worse during already congested rush hours, because of the extra cars they add to the road, and because these drivers look at their phones more for passenger pick ups and directions. [9][10] Researchers found that ride-hailing contributes to a net increase in greenhouse gas emissions. [2]
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Con 2
Ride-hailing drivers earn low pay that is often below minimum wage.
As contract workers, drivers don’t receive employee benefits. They also pay for gas and car maintenance, something 44% of drivers say they have a hard time affording. [15][16][17] The Economic Policy Institute says that “Uber drivers earn less than what 90 percent of workers earn,” and their hourly compensation “falls below the mandated minimum wage in nine of 20 major markets.” [15]
A 2018 report from economists at UC Berkeley and the New School found that 40% of ride-hailing drivers “have incomes so low they qualify for Medicaid and another 16 percent have no health insurance; 18 percent qualify for federal supplemental nutrition assistance (nearly twice the rate for New York City workers overall).” [18]
Half of ride-hailing drivers are the main earners for their families and are supporting children [18] Given a median hourly pay of $14.73 for Uber drivers, a 40-hour work week would result in an annual salary of close to $31,000 before vehicle expenses, and about $20,000 after accounting for costs incurred by drivers – right at the poverty threshold for a family of three. [19][20] Wages for drivers dropped 53% from 2014 to 2017. [21]
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Con 3
Ride-hailing services have a history of poor driver screening that puts passengers at risk.
While taxi drivers are subject to rigorous security screening involving fingerprint checks in an FBI database, ride-hailing drivers are only subject to limited background checks. [30] A 2016 lawsuit brought by the cities of Los Angeles and San Francisco revealed that 25 drivers with serious criminal records, such as murder and kidnapping, had passed Uber’s background checks. [31][32]
San Francisco District Attorney George Gascon, who sued Uber for allegedly failing to protect consumers from fraud and harm, said of the company’s security screening process that does not include fingerprinting, “It is completely worthless.” [33][34]
A Dec. 2019 report from Uber stated that, among riders and drivers, there had been 10 murders in 2017 and nine in 2018, and 2,936 sexual assaults ranging from nonconsensual touching to rape in 2017 and 3,045 in 2018. [35] One woman wrote in an open letter from 14 victims of sexual harassment and rape by Uber drivers, “Although I immediately reported what happened to Uber, shockingly, this predator continues to drive for Uber to this day. I am 21 years old and will have to live with this the rest of my life.” [36]
Actress Pamela Anderson has made public service announcements warning that ride-hailing apps “are optimized for predators and will remain so until common sense safety measures are put in place.” [37]
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Source: Al Olson, “This Is What Lyft Is Doing to Keep People from Driving High in Colorado,” thefreshtoast.com, Mar. 23, 2017
Did You Know?
- 70 percent of Uber and Lyft trips occur in nine big metropolitan areas: Boston, Chicago, Los Angeles, Miami, New York, Philadelphia, San Francisco, Seattle, and Washington, DC. [3]
- Among ride-hailing users, 17% percent use the services daily or weekly; 3% of all American adults report using them daily or near-daily. [1]
- One in five adults (19%) age 30-49 have used ride-hailing, compared to 4% of Americans over age 65. [1]
- Ride-hailing users are twice as likely to be Democrats (65%) as Republicans (33%). [1]
- People age 25 to 34 who have a bachelor’s degree and earn over $50,000 annually are two to three times more likely to use ride-hailing as those who are older, do not have a college degree, and earn less. [3]
1. How are ride-hailing apps a benefit to society? Explain you answer(s).
2. How are ride-hailing apps not beneficial to society? Explain you answer(s).
3. What are your thoughts on the ride-hailing app template being used for other services? Explain your answer(s).
1. Analyze how ride-hailing apps have bred a new type of start-up according to Paul Sawers.
2. Explore this survey of ride-hailing apps with CNET.
3. Consider how ride-hailing failed to reduce traffic congestions according to Eliot Brown.
4. Push for the position and policies you support by writing US national senators and representatives.
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