sales and income for other area businesses. A portion of driver income also generates sales of fuel and vehicle maintenance services. As workers in those industries spend their own income, they generate further rounds of economic impact—all of which traces back to the money that Uber
3 drivers spend. We use an economic impact model (described in the appendix) to calculate Uber’s contribution to the California economy. Uber’s contribution to gross state product in California The net impact of Uber on state income is $390 million annually. This includes $189 million from added business productivity, $199 million from spending shifts toward greater local sales, and $2 million of inflow from visitor spending. Uber’s net impact in California is different than its economic contribution or gross impact. Net impact accounts for offsetting gains and losses among various industries and service providers, including tracing shifts in how people spend money on various types of transportation services. Accounting for spending gains and losses in each industry and how they offset each other, the net economic impact is a change in economic growth—the difference between state income with Uber and without it. When riders and drivers choose Uber over other options, they gain benefits discussed in the following sections of this report. These choices affect transportation costs and hence business productivity, and they also affect local spending patterns and inflows of income. To be conservative, we focus on current impacts and do not include major changes in vehicle ownership and parking facility usage in our analysis, which will have additional longer-term economic impacts. $- $100 $200 $300 $400 $500 $600 Gross State Product (millions)
4 Productivity. When Uber saves time or costs for business travel, this translates into real labor and expense savings for businesses. It represents a productivity gain that reduces the cost of doing business and makes local businesses more competitive. Altogether, 10.2% of Uber trips reported through surveys in California are for business travel, 1 and this type of travel has a disproportionately large impact on cost savings because of the transportation alternatives that business travelers are most likely to use. Local business. When travelers use Uber instead of driving an owned or rented car, they shift their spending pattern to support more local labor income. When Uber riders shift from other modes of transportation and save on travel costs, they are left with more money to spend on local meals, entertainment, and services that can generate more local worker income. Overall, 47% of non-business Uber trips result in cost savings over their transportation alternative, enabling the savings to be used for other types of spending. Inflow of money to the state. When Uber enables trips that would otherwise not occur, riders sometimes spend more locally. This effect is particularly notable for visitors from outside the region who are not simply shifting their spending from one part of California to another. Overall, 10.6% of Uber trips in California are taken by visitors, and 24% of visitors report spending more
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- Economics, Value added, Economic impact analysis, Transport network