The Uber economy has been a revolutionary concept in the way we think about transportation and labor in the 21st century. Uber, the ride-hailing company, has remade the way Americans travel and entrepreneurs structure their businesses. With the app’s rise in popularity, some have referred to the economic system as the “Uber economy”.
The Uber economy is a booming business model, but is without a doubt not without its criticisms and controversial points. Consequently, wisdom dictates that an inquiry into the pros and cons of the Uber economy should be attempted, before one commences making judgments.
What is the Uber Economy?
The Uber economy is often associated with the rise of the gig economy, which is the network of online platforms that connect employers and freelance workers in order to accomplish short-term contractual tasks. Drivers for Uber-and other ride-hailing companies, for instance, typically work as contractors, and not as employees. More specifically, when one uses the Uber app to hail a ride from one point to another, the driver supplying the ride is participating in the Uber economy.
Other companies such as Airbnb, TaskRabbit, and Postmates are all examples of companies who are involved in the growing gig economy and the Uber economy. This economy is considered to be beneficial for those who work in it because the platform bases operations on instant payments and it’s relatively easy to join.
Pros of the Uber Economy
- Flexibility:
The greatest benefit that Uber drivers possess is the ability to set their own schedule. Uber drivers can choose when they want to work and how many hours they want to devote to driving each day. This allows them to work around their other commitments and personal life. This can be beneficial for students, parents, and those who are retired and are looking for a way to add an additional revenue stream to their life.
- Earnings Potential:
In many cases, Uber drivers make more money than they could make in a regular job. Considering it’s a flexible full-time income, additional earnings are made while drivers are off the clock but they still get paid. It’s a great way to make more money without compromising your day-job.
- Easy to Join:
Joining a platform like Uber is extremely easy and it is normally only very informal requirements such as needing a driver’s license and owning a vehicle that is suitable to fulfill the rideshare requirement. In some areas, Uber also offers financial assistance to people who are trying to join the platform and in some cases they even offer incentives for new drivers. The low-barrier to entry is extremely attractive from an economic standpoint.
- Additional Services:
The Uber economy has blossomed into much more than just a ride-hailing service. Many types of services are offered with the Uber app, such as food and courier delivery. This provides a wide range of opportunities for drivers and other service-providers that want to participate in the Uber economy.
Cons of the Uber Economy
- Unsustainable Earnings:
Despite the potential of Uber, many drivers struggle to make a living. This is especially true in cities where there is a high level of competition, as the actual earnings are lower than expected. Furthermore, Uber’s tipping policy can make the job less financially rewarding, where tips become scarce and riders become reluctant to tip.
- Dependence on Technology:
The success of Uber, as well as other gig economy platforms, is directly linked to their technological advancements and capabilities. Drivers are completely dependent on technology when they are using the Uber app. This means that if the technology fails or if there are issues, the drivers can’t work and will be unable to receive payments.
- Minimization of Human Interaction:
One of the issues that comes along with the lack of technology is the lack of communication between riders and drivers. This lack of communication can result in frustration from the rider and from the driver. Furthermore, since Uber is operated by GPS, riders will often select the shortest route and it doesn’t permit the driver to take a longer route which might yield them more money.
- Poor Safety:
Safety is a key issue in the Uber economy. Since Uber is a largely unregulated system, there is a higher chance of riders being placed in an unsafe situation than if they had used a regulated ride-hailing service like Lyft or a taxi. Furthermore, Uber does not require background checks for its drivers and this could lead to potentially risky encounters.
The Uber economy is an important and revolutionary step in the modernizing of the gig economy. However, it is not without its critics and controversies. This article has outlined the pros and cons of the Uber economy and comes to the conclusion that regardless of its faults, the rise of the Uber economy remains a powerful demonstration of how technology can be leveraged to both benefit and undermine individuals’ autonomy within the gig and ride sharing economy.
