How much would be lost if Uber simply went away? That's actually happened in Austin, Texas, and the service has faced legal troubles in France, Spain, Germany and parts of India.
How much is really at stake? A new paper by Peter Cohen, Robert Hahn, Jonathan Hall, Steven Levitt (of "Freakonomics" fame) and Robert Metcalfe comes up with a pretty good, dollars-and-cents measure of how much UberX, the main Uber service, is improving the lives of its users.
Based on their study, here are a few ways of framing the value of Uber ride services to Americans:
- For a typical dollar spent by consumers on UberX, they receive $1.60 worth of gain.
That's an unusually high amount of "consumer surplus," as it is called by economists. It means there aren't that many close substitutes for Uber at prevailing prices, as moving people around is something the U.S. does not do especially well.
- UberX produces daily social value of about $18 million.