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January 30, 2017

Study: Uber may have lowered wages, but taxi driver jobs have not been displaced

by John_A

Why it matters to you

If you’re a taxi driver where Uber exists, this study shows you should be more concerned about your hourly wage than losing your job.

One of the taxi industry’s biggest complaints against ridesharing platforms like Uber is their negative economic impact, particularly when it comes to the number of taxi driver jobs. According to a study of data from the U.S. Bureau Labor of Statistics, however, that impact is not as negative as it might seem.

Published by the University of Oxford, “Drivers of Disruption? Estimating the Uber Effect” looks at Uber’s effects in large cities like New York, Los Angeles, and San Francisco between 2009 and 2015. According to Dr. Carl Benedikt Frey, one of the paper’s authors, this is the first time anyone has taken a close look at Uber’s impact on jobs.

More: Your Uber driver might be sleeping in his car at night, report reveals

“Uber is the flagship of the sharing economy,” said Frey. “But what our study shows is that even in one of the sharing economy’s most exposed industries, traditional jobs have not been displaced.”

To that point, the study finds that, even though the number of self-employed drivers increased by 50 percent once Uber showed up, the number of regularly employed taxi drivers also increased, albeit slightly. As for how much money was earned, self-employed drivers saw a 10-percent wage increase while taxi drivers saw a 10-percent decrease with Uber’s arrival.

The study surmises the wage bump for self-employed drivers is due to their more efficient use of time and services, which allows the per-ride rate to result in an increase in the hourly wage.

“The higher hourly earnings among self-employed drivers suggest that capacity utilization, in terms of the time spent in the car with a passenger, has increased with Uber, as its platform allows for better matching between drivers and passengers,” said Frey. “But for traditional taxi drivers the effect has been the opposite, with a decline in the amount of time they have a passenger in their vehicle.”

The study does not look at the number of rides self-employed and regular taxi drivers undertook, though it concludes we should take a hard look at data before any restrictions are issued.

“The effects are complex,” said Frey. “While some have seen a loss in income, Uber has also created more jobs than it has destroyed, demonstrated by the staggering expansion of self-employment following its introduction.”

The study comes after a recent report unveiled that full-time Uber drivers will trek to areas with higher fares, even if it means they sleep in their cars.

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