What does Uber bring for consumers?

Abstract

This paper estimates the consumer surplus that Uber brings for consumers. The estimation uses three datasets: individual-level choice dataset—the National Household Travel Survey (NHTS) data of 2008–2009, origin-destination level dataset—Uber data, and Google data of 2017. Firstly, we use NHTS data to identify consumer's preferences in 2008 under a discrete-choice framework. Assuming unchanged preferences of consumers, we use the coefficients of the discrete-choice model to reveal passengers' demand on different transportation modes in 2017. After revealing the demand curve, this paper calculates the consumer surplus by differencing the consumer surplus in the circumstance where Uber is available with the consumer surplus of the scenario if Uber is not available. We find that Uber brings at least $0.76 gains for each trip. The overall consumer surplus generated by Uber in San Francisco is around $100 million per year.

Keywords

• Uber
• Sharing economy
• Discrete choice
• Consumer surplus