Look on the streets of any major American city, and you see the cars of Uber and Lyft. Finding accurate measures of the size of this gig economy, however, has been a major challenge for researchers.
A new study from the Brookings Institution mines a novel source of data for new insights, especially when it comes to ride-hailing companies.
The study from economists Ian Hathaway and Mark Muro looked at an obscure set ofCensus Bureau and Internal Revenue Service data on “nonemployer firms,” defined as businesses that earn at least $1,000 a year in gross revenue, but have no employees. In other words, exactly the sort of place most drivers for Uber or Lyft would show up in tax data.
They find the number of people earning at least $1,000 a year on personal businesses in the taxi, limousine and ground transportation industry has skyrocketed to 346,000 in 2014 (the latest available data) from 197,000 in 2009. The numbers seem to align with what the companies themselves have revealed: Uber, for example, was founded in 2009 and had 160,000 drivers by the end of 2014.
Unlike many data sources, these figures are available city by city, so Mr. Hathaway and Mr. Muro analyzed which cities saw the fastest growth through 2014 and whether ride-hailing was cannibalizing the incumbent payroll employees in the city who worked in ground transportation.
The results of that analysis for the 50 largest cities are curiously inconclusive. Some cities have seen solid growth in both arrangements. Others have seen a decline in payroll employment.
“Are we seeing the fulfillment of unmet demand or the cannibalization of incumbent, payroll employment?” Mr. Muro asked. “It doesn’t seem a clear case either way.” (The figures reveal nothing about the wages or profits in the payroll firms, which could be falling, even as the number of employees isn’t.)View Article