From the first-ever Uber Economic Impact Report 2021 in Bangladesh what has Uber been able to do for Bangladesh’s economy?
Our research into Uber’s contribution to Bangladesh’s economy found that the company generated Tk4,500 crore for the nation in 2021 through its ridesharing services in the capital and elsewhere across the country.
This contribution came through riders, driver-partners and a wide range of communities linked to the ride-sharing company’s services including direct and indirect taxes paid to the government.
What we found was that the company’s wider supply chain successfully produced an indirect and induced multiplier effect through creating employment opportunities and social mobility, with Uber playing an important role in Bangladesh's socioeconomic growth by creating secondary income sources.
Rides on Uber’s platform produced Tk7,000 crore in consumer surplus in 2021, roughly equivalent to 0.25% of the GDP of the country, and saved riders over 17 million hours a year.
We also saw that 95% of its riders considered comfort as an important reason for choosing to use Uber. 73% of driver-partners said they were satisfied with Uber in 2021.
Collectively, they earned an additional Tk52.2 crore through Uber or an average of 26% more than their next best alternative source of income.
What was your research methodology?
In our attempt to find the platform's contribution, we dove deep into the factors behind the economic contribution, consumer surplus, how users benefit, and how driver-partners gain from flexible work.
The study was conducted on 1,029 riders and 987 drivers through online polls, and by using Uber’s internal data.
As part of the driver survey, we asked a single discrete binary choice question for each of the factors.
For the value of flexibility factors, we then used a probit logit regression (it is used to model dichotomous or binary outcome variables) to derive a demand curve, and the total driver-partner surplus per user, averaging the results of the two models.
This model was conditional on location, which was then scaled up to a national level and regional level with the data provided by Uber on driver-partner numbers.
For consumer surplus, we actually followed the methodology of Brynjolfsson, Collis and Eggers (2019) and used the values obtained to compute both a linear and logarithmic regression of the results of the poll to derive a demand curve and the total consumer surplus per user, taking the average as the headline measure.
We also asked users or riders why they used Uber and the duration of their most recent trips with Uber, and how long the next best alternative would have taken. The findings were then quantified.
What has been the most interesting finding from this research?
One of the most interesting findings would be that a significant portion of the driver-partners that we surveyed said they chose to work for ridesharing services like Uber because they like to drive.
What they say is that previously, it was not a passion they could pursue since the related earnings did not justify that specific choice.
However, with the ability to earn a fair and decent amount while enjoying work flexibility, they were able to have a livelihood through driving and serving people. That was something they liked the most about Uber and it was fascinating.
How do you think the ridesharing industry has helped Bangladesh to grow? And how will it contribute better to the growth of the country?
It has been evident from our findings that the ride-sharing industry has helped the local economy in many ways, from creating employment opportunities to enabling the gig economy that provides people with flexibility in their work schedules.
The availability of ridesharing services like Uber is also important to people's choice of not owning a vehicle.
Our research found that one in six trips through Uber connected people with public transport, and that’s just one of the perks of the industry.
A total of 84% of riders without access to a car said that ride-sharing services like Uber were important for not owning a car.
The industry also plays a very important role in saving consumer money and time. It has been found that Uber alone, as an industry player, saved riders over 17 million hours a year, in just 2021.
Not just that, the ride-sharing industry also successfully helped digital financial transactions grow further.
With continued and focused market and product innovations from industry players, such contributions will help Bangladesh move forward further and accelerate economic growth.
How has Uber contributed to developing the gig economy in Bangladesh?
The ability to choose flexible hours of work and balance time with the opportunity to have secondary jobs that provide an additional income, which pays higher than the next best alternative, has transformed the local gig economy.
Increased rider safety and other services offered by the platform have also enabled the gig economy to grow by enabling more consumers to choose platforms that fuel such models.
What does the report indicate about Uber's impact on providing an extra source of income?
Our research showed Uber has been playing an important role in Bangladesh's socioeconomic growth by creating livelihood opportunities and secondary income sources.
As previously mentioned, our findings showed that the app’s driver-partners earned an additional Tk52.2 crore a year in income through Uber or an average of 26% more than their next best alternative.
More than half of the driver-partners surveyed said that schedule flexibility was important to them when looking for work, stressing how the platform has transformed the economy.
This was because only a minority of the driver-partners depend on Uber as their only source of income.
The ability to choose flexible hours of work and balance time was found to be particularly important to driver-partners, as many drivers balance their time on the Uber app with jobs, platform work, education or caring responsibilities.
