New Report: UberX Helps Low-Income New Yorkers

I’ve written multiple blogs explaining how the sharing economy provides access to services and income that many people would not have otherwise. This access increases the standard of living of all sharing economy users, but it has an even greater beneficial impact on low-income users compared to high-income users. (See here and here.) Free State Foundation scholars also discussed this important economic effect in our comments to the Federal Trade Commission back in May 2015.

Jared Meyer, Fellow at the Manhattan Institute, has authored a new report entitled “Uber-Positive: The Ride-Share Firm Expands Transportation Options in Low-Income New York,” presenting evidence that Uber’s service greatly benefits low-income New Yorkers. While Mr. Meyer’s report does not analyze which income group benefit more from Uber’s service, it certainly disputes the stereotype that Uber passengers are generally wealthy.

In a follow-up blog, Mr. Meyer discusses the popularity of UberX (Uber’s lowest-cost, non-luxury, and most frequently used service) in poor neighborhoods:

The largest increase in UberX rides from January 2014 to December 2014 was seen in zip codes with below-median incomes. Seven of the 11 zip codes outside core Manhattan (below Central Park North) that saw their numbers of rides grow by over 1,000% have below-median incomes.

Over the course of 2014, the historically low-income neighborhoods of Jackson Heights, Astoria, Harlem and Washington Heights all saw increases in UberX trips of over 1,200% — that’s more than 12 fold.

Mr. Meyer also disputes the stereotype that Uber is not popular in predominately black communities: “In the 29 zip codes outside of core Manhattan with one or more UberX pick-up per household during 2014, black households made up an average of 29% of households, while the average for all zip codes outside of core Manhattan was 27%.”

Mr. Meyer argues that NYC Mayor Bill de Blasio’s theory that Uber trips are creating congestion is exaggerated because in 2014 “there were around 175 million annual yellow taxi trips, and just under 9.5 million UberX trips.”

I think it’s fair to say that Uber and other ridesharing companies are having a positive impact in New York for people of all backgrounds, ethnicities, and income levels. Mayor de Blasio should take note of this report and encourage Uber’s growth, not attempt to restrict it as he has tried in the past. (See this blog for more.)

Uber's New Feature Likely Caused de Blasio to Drop Bill

On Wednesday, July 22, New York City Mayor Bill de Blasio dropped his proposed legislation which would have slowed the growth of Uber in NYC by limiting the number of drivers it could add over the next year, according to a New York Times article. This is very good news for the NYC economy. Prior to the bill’s cancellation, according to a TechCrunch article, David Plouffe, Chief Advisor for Uber, said the regulation would “cost 10,000 jobs, hurt underserved areas, and make wait times for Uber cars skyrocket.”

Mayor de Blasio likely dropped the proposed legislation due to an outcry from consumers and drivers, which Uber helped enable through use of its application. Even a couple famous celebrities jumped in on the action.

Proposed bill will result in longer wait times, higher prices, and less reliable service for riders. #deBlasioUber pic.twitter.com/5R2ToNhEuY

— ashton kutcher (@aplusk) July 21, 2015

.@BilldeBlasio Why do you want to return to days when only those in Midtown & Lower Manhattan could get a ride? #UberMovesNYC

— Kate Upton (@KateUpton) July 22, 2015

In response to the bill, Uber added a so-called “de Blasio’s Uber” feature to its application for over 2 million NYC users. When NYC users clicked on this feature it showed either no available drivers or a wait time of 25 minutes, representing how Mayor de Blasio’s proposed legislation would have severely impacted the market. (Uber rarely has a wait time over 5 minutes in populated cities.)

Then, instead of contacting a driver, the feature prompted an email to Mayor de Blasio and NYC’s City Council Members with an automatic statement opposing the bill. 

Free State Foundation Scholars submitted comments to the FTC prior to its June 9 workshop, warning against burdensome “sharing economy” regulations that did not serve legitimate health and safety objectives. FSF Scholars stressed that policymakers should focus on how the sharing economy has brought consumers efficiency, affordability, and convenience. So, it is good that consumers and drivers stood up against Mayor de Blasio’s protectionist legislation that would have inhibited Uber’s growth.

This example may dampen efforts by government officials in this country and around the world to restrict innovative new sharing economy businesses that benefit consumers by creating more competition and choice.