In his State of the Union address Tuesday night, the President talked about “the millions of Americans who work in jobs that didn’t even exist ten or twenty years ago.” New technologies are creating opportunities that no one could have imagined. Many want jobs that better suit their lifestyles and commitments, whether that means more time to care for children or elderly parents, or more freedom to pursue their passions. Those very desires are challenging the notion that work equals a traditional 9-to-5 job.
To understand Uber’s place in that trend, we asked the research firm Benenson Strategy Group to conduct a survey of our driver-partners and enlisted Princeton Economist Alan Krueger to work with my team on a comprehensive analysis. Here is what we found:
Who is Choosing Uber: A Diverse Group with Different Use Cases
Driver-partners are using the Uber platform in many different ways, from earning a full-time income to supplementing their salaries at other jobs. The one commonality is that they are using it to support their families or the lives they are choosing to lead.
What we are finding is that our partners fit into four main archetypes:
- The Pros — 18% — These are our UberBLACK partners. The Pros have the highest proportion of drivers who have been on the Uber platform for more than 6 months.
- Crossovers — 18% — This group consists of uberX drivers who previously drove taxis or black cars, but have only been active on the Uber platform for less than 6 months.
- New Enthusiasts — 12% — New to the platform, and have taken up driving with uberX consistently. Most likely cohort to say they drive to maintain a steady income because other sources are unstable.
- Part-Timers — 52% — The largest grouping of partners on the uberX platform, and the most likely to be seeking a flexible earning opportunity. 75% of this group hold other jobs besides Uber.
We also found that Uber is drawing more individuals into the vocation of being a driver. But that isn’t because more people are turning to contract work; instead, it’s because self-employment offers them a more flexible way to earn a living.
Why They Are Choosing Uber: Flexibility
The Bureau of Labor Statistics found that 82% of independent contractors in the U.S. prefer their work arrangement to a traditional 9-to-5 gig. When Uber partners were asked “If both were available to you, at this point in your life, would you rather have a steady 9-to-5 job with some benefits and a set salary or a job where you choose your own schedule and be your own boss?” 73 % chose the latter.
- 87% Want to Be Their Own Boss: Respondents claimed a major reason for working with Uber was “to be my own boss and set my own schedule.” In fact, 65% of driver-partners changed the number of hours worked per week by more than 25% from one week to the next.
- 85% Want Work–Life Balance: A similar overwhelming majority claimed a major reason to work with Uber was “to have more flexibility in my schedule and balance my work with my life and family.” Notably, 51% of driver-partners work 15 hours or less a week, when they decide to work at all.
- Almost half of Uber’s driver partners previously worked in the for-hire transportation industry. They told us they choose to partner with Uber because it frees them from traditional taxi “shift work” that requires a high cost of entry. Driver-partners are able to optimize their expenses and earn at least as much in their old jobs, if not more. This means that 50% of them were not previously driving to make a living. They only chose to become drivers because Uber came to town.
Uber Driver-Partners Enjoy Better Earnings
- The vast majority of driver-partners say they are better off financially because of Uber — 71% of partners say that their income is better since signing up with Uber. In fact, in the last quarter of 2014, Uber paid out over $650 million to driver-partners in the U.S. And comparisons to government data on the average earnings of taxi and limo drivers tell a similar story.
- Uber represents a steady source of income for 3 out of 4 partners — 74% of partners choose Uber to help maintain a steady source of income to supplement their otherwise unpredictable earnings. Using Uber to steady their earnings makes sense since, as we discovered in our research, driver-partners earn the roughly same per hour regardless of the number of hours worked.
- 1 out of 3 drivers are using Uber to make extra spending money — Nearly a third of partners have full-time jobs, but use the Uber platform to boost overall household or family income.
What This Means for Cities
Policymakers are acknowledging the importance of flexible economic opportunity too. Last year alone, 22 jurisdictions across the U.S. (cities and states) adopted smart, modern regulations for the ridesharing industry, ensuring that Uber and other platforms can continue to connect riders with safe, reliable and hassle-free rides — along with a better way for drivers to make a living.