Uber, Lyft, and Other Ride-Hailing Apps – Top 3 Pros and Cons

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The first Uber ride was on July 5, 2010 in San Francisco, CA. The app launched internationally in 2011 and reached one billion rides on Dec. 30, 2015, quickly followed by five billion on May 20, 2017 and 10 billion on June 10, 2018 [40]

On May 22, 2012, Lyft launched in San Francisco as a part of Zimride and expanded to 60 cities in 2014 and to 100 more in 2017, at which point Lyft claimed more than one million rides a day. On Nov. 13, 2017, Lyft went international, allowing the company to reach one billion rides on Sep. 18, 2018. [41]

Other ride-hailing and ride-sharing apps include Gett (which partners with Lyft in the US), Curb, Wingz, Via, Scoop, and Bridj. [42]

36% of Americans said they used ride-hailing services such as Uber or Lyft, according to a Jan. 4, 2019 Pew Research Center Survey. Use is up significantly from 2015 when just 15% had used the apps. [38]

But use varies among populations. 45% of urban residents, 51% of people who were 18 to 29, 53% of people who earned $75,000 or more per year, and 55% of people with college degrees, used the apps, compared to 19% of rural residents, 24% of people aged 50 or older, 24% of people who earn $30,000 or less per year, and 20% of people with a high school diploma or less. [38]

In 2018, 70% of Uber and Lyft trips occurred in nine big metropolitan areas: Boston, Chicago, Los Angeles, Miami, New York, Philadelphia, San Francisco, Seattle, and Washington, DC. [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. Ride-hailing trips were down significantly in 2020 and 2021 due to the COVID-19 pandemic. [3] [39]

Are Ride-Hailing Companies a Benefit to Society?

Pro 1

Ride-hailing apps are convenient, affordable, and safe for riders and other drivers.

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]

A full third of ride-hailing passengers who own vehicles (33%) said the main reason they use the service is to avoid driving while they are drunk. [5]

Fatal alcohol-related car accidents dropped between 10% and 11.4% after the introduction of ride-hailing services and DUI (Driving Under the Influence) citations went down as much as 9.2% in some cities. 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. [6] [7]

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Pro 2

Ride-hailing companies create jobs and boost the economy.

In 2018, there were more than two million Uber and Lyft drivers in the United States. Uber reported $12.9 billion in 2017 take-home gross revenue for its US drivers. Drivers have flexibility to set their own hours (a benefit that 80% cite as important to them) and 23% were unemployed prior to becoming a driver. 63% of drivers work behind the wheel fewer than 20 hours per week, using the job to supplement other incomes and pay bills. [11] [12] [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. 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 Uber Assist, which offers door-to-door assistance, serve the estimated 26 million US seniors who rely on others for transportation. Uber and Lyft partner with senior organizations, retirement homes, and healthcare providers to arrange rides for seniors who aren’t comfortable using technology. 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. [22] [23] [24] [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 vegetables, and also pledged $1.5 million to transport veterans and people with low incomes to medical appointments and job interviews. [27] [28]

Researchers 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. 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 US. 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. As many as 60% of riders would have used public transit, walked, biked, or not taken a trip at all if ride-hailing weren’t an option. That means that nearly two-thirds of ride-hailing trips added additional cars to the roads. [2] [3] [9] [10]

Studies show that ride-hailing makes traffic worse during already congested rush hours because of the extra cars on the road and drivers look at their phones more for passenger pick ups and directions. Researchers found that ride-hailing contributes to a net increase in greenhouse gas emissions. [2] [9] [10

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Con 2

Ride-hailing drivers earn low pay that is often below minimum wage.

The Economic Policy Institute stated, “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 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. Wages for drivers dropped 53% from 2014 to 2017. [18] [19] [20] [21]

As contract workers, drivers don’t receive employee benefits such as health insurance. They also pay for gas and car maintenance, something 44% of drivers say they have a hard time affording. [15] [16] [17]

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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 through the FBI database, ride-hailing drivers are only subject to limited background checks. 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. [30] [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. 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.” [35] [36]

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Discussion Questions

1. Are ride-hailing apps a benefit to society? Explain your answer(s).

2. Consider how the “gig” employee model impacts society. Explain your answer(s).

3. What are your thoughts on the ride-hailing app template being used for other services? Explain your answer(s).

Take Action

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. Consider how you felt about the issue before reading this article. After reading the pros and cons on this topic, has your thinking changed? If so, how? List two to three ways. If your thoughts have not changed, list two to three ways your better understanding of the “other side of the issue” now helps you better argue your position.

5. Push for the position and policies you support by writing US national senators and representatives.

Sources

1.Aaron Smith, "Shared, Collaborative and On Demand: The New Digital Economy," pewinternet.org, May 19, 2016
2.Caroline Rodier, "The Effects of RideHailing Services on Travel and Associated Greenhouse Gas Emissions," ncst.ucdavis.edu, Apr. 2018
3.Bruce Schaller, "The New Automobility: Lyft, Uber and the Future of American Cities," schallerconsult.com, July 15, 2018
4.Winnie Hu, "Uber, Surging Outside Manhattan, Tops Taxis in New York City," nytimes.com, Oct. 12, 2017
5.Regina R. Clewlow and Gouri Shankar Mishra, "Disruptive Transportation: The Adoption, Utilization, and Impacts of Ride-Hailing in the United States," ucdavis.edu, Oct. 2017
6.Frank Martin-Buck, "Driving Safety: An Empirical Analysis of Ridesharing's Impact on Drunk Driving and Alcohol-Related Crime," frankmartinbuck.com, Nov. 17, 2016
7.Brad N. Greenwood and Sunil Wattal, "Show Me the Way to Go Home: An Empirical Investigation of Ride-Sharing and Alcohol Related Motor Vehicle Fatalities," MIS Quarterly: Management Information Systems, Mar. 1, 2017
8.Johnny Jet, "Do Uber's New Safety Features Make Ridesharing Safer?," forbes.com, June 15, 2018
9.David Schaper, "Ride-Hailing Services Add to Traffic Congestion, Study Says," npr.org, Aug. 1, 2018
10.Steven R. Gehrke, Alison Felix, and Timothy Reardon, "Fare Choices: A Survey of Ride-Hailing Passengers in Metro Boston," mapc.org, Feb. 2018
11.Patrick Sisson, "The Rideshare Guy on Uber, Lyft, and What Their Drivers Really Want," curbed.com, May 22, 2018
12.Uber, "Uber in the Economy," uber.com, July 28, 2018
13.Economic Development Research Group, "Uber's Economic Impacts in the United States," edrgroup.com, July 26, 2018
14.Lyft, "2018 Economic Impact Report," lyft.com, 2018
15.Lawrence Mishel, "Uber and the Labor Market," epi.org, May 15, 2018
16.Kate Gibson, "About Half of Uber, Lyft Drivers Make Less Than Minimum Wage: Revised Estimate," thedrive.com, Mar. 6, 2018
17.Erik Sherman, "Uber and Lyft Drivers Are in a World of Trouble If This New Study Is Right," inc.com, June 1, 2018
18.James A. Parrott and Michael Reich, "An Earnings Standard for New York City's App-based Drivers: Economic Analysis and Policy Assessment," centernyc.org, July 2018
19.Rani Molla, "Half of U.S. Uber Drivers Make Less Than $10 an Hour after Vehicle Expenses, According to a New Study," recode.net, Oct. 2, 2018
20.Assistant Secretary for Planning and Evaluation, "Poverty Guidelines," aspe.hhs.gov (accessed Dec. 17, 2018)
21.Steve LeVine, "The 53% Ride-Hailing Pay Cut," axios.com, Sep. 24, 2018
22.Mark Edelen, "The New Senior Transportation: Uber and Lyft Ride-Sharing," after55.com, Jan. 9, 2017
23.National Aging and Disability Transportation Center, "2016 Transportation Trends: A Look at the Year's Top Mobility Challenges & Opportunities," nadtc.org, Feb. 2017
24.Marco della Cava, "Lyft Deal with Allscripts Lets 180,000 Doctors Call Rides for Their Patients," usatoday.com, Mar. 5, 2018
25.Taryn Phaneuf, "Ride-Hailing Service Aims to Go the Extra Mile for Seniors, People With Disabilities," americaninno.com, Sep. 26, 2018
26.Cassandra Dowell, "Brookdale Turns to Uber-Like Service to Transport Residents," innovation.seniorhousingnews.com (accessed Dec. 17, 2018)
27.Jeanette Settembre, "Lyft Is Offering $2.50 Rides to Grocery Stores for People Living in 'Food Deserts'," marketwatch.com, Dec. 12, 2018
28.Lyft, "Expanding Lyft Relief Rides to Help Those in Need," blog.lyft.com, May 2, 2018
29.Anne E. Brown, "Ridehail Revolution: Ridehail Travel and Equity in Los Angeles," its.ucla.edu, Jan. 1, 2018
30.Bob Egelko, "Lyft, Uber Drivers Won't Need Fingerprint Checks, California Rules," sfchronicle.com, Nov. 9, 2017
31.Marrian Zhou, "Uber, Lyft Reportedly Skimp on Background Checks," cnet.com, Aug. 31, 2018
32.Nick Statt, "Uber Will Pay $10 Million to Settle Lawsuit over Driver Background Checks," theverge.com, Apr. 7, 2016
33.Dara Kerr, "California DAs Sue Ride-Sharing App Uber, Settle with Rival Lyft," cnet.com, Dec. 9, 2014
34.Ellen Huet, "SF, LA District Attorneys Sue Uber, Settle with Lyft over 'Misleading' Business Violations," forbes.com, Dec. 9, 2014
35.Kate Conger, "Uber Says 3,045 Sexual Assaults Were Reported in U.S. Rides Last Year," nytimes.com, Dec. 5, 2019
36.Katherine, Lauren, Sophia, K.B., Rachel, Jane Doe 6, Stephanie, Joy, Jennifer, Sasha, Annie,Elizabeth, Briana, and Addison, "Open Letter to the Board of Directors of Uber Technologies, Inc.," wigdorlaw.com, Apr. 26, 2018
37.Kari Paul, "Pamela Anderson Claims Uber Is Not Safe for Women," marketwatch.com, Jan. 8, 2018
38.Jingjing Jiang, "More Americans Are Using Ride-Hailing Apps," pewresearch.org, Jan. 4, 2019
39.Levi Sumagaysay, "Uber and Lyft Expect Ride-Hailing to Make a Sharp Recovery, but There Are Some Potential Roadblocks," marketwatch.com, Apr. 28, 2021
40.Uber, "The History of Uber," uber.com (accessed Aug. 17, 2021)
41.Andrew Greiner, Matt McFarland, Ivory Sherman and Jen Tse, "A History of Lyft, from Fuzzy Pink Mustaches to Global Ride Share Giant," cnn.com, Apr. 2, 2019
42. Kailla Coomes and Andre Revilla, "The Best Ridesharing Apps for 2021," digitaltrends.com, Mar. 30, 2021