Is Lyft Good For the Economy ?

lyftThe on-demand ride-hailing industry has found its stride and is certainly a popular alternative, these days, to the traditional taxi.  And the popularity of companies like Uber and Lyft shows not only in its pop culture penetration and water cooler mentions, but also in terms of local economy improvement.

For example, new data shows that Lyft passengers contributed $33.5 million in new spending to Boston’s economy.  This is only a drop in the $750 million bucket the company added to the global economy last year.

But while these numbers might be quite impressive, Lyft head of policy Peter Gigante comments they do not necessarily include the “value” that the service provides to riders. He argues that these numbers only begin to indicate how much more money riders spend on things like restaurants and shopping because they were able to get a ride.

Gigante explains, “We asked passengers to think about their spending on shopping and entertainment before they had access to Lyft and then afterwards. [We looked at] are people spending more and if so by what amount, and then calculated that by ride activity across the Boston metro region.”

In general, then, the company argues that local businesses become more easily accessible to more of the community in places where Lyft (et al) is popular.  Indeed, at least 77 percent of passengers who use Lyft report that the service gives them access to more metro areas; and 73 percent also said that they now go out more often than they used to, or stay out longer than they normally would.

In addition, approximately fifty-five percent of Lyft passenger said they have probably spent more at local businesses over the course of this year because of ride-hailing apps.  Perhaps most importantly, about 41 percent of Lyft rides begin in areas and communities that are grossly underserved by other forms of [public] transportation.

Gigante continues, “It’s really indicative of the change in mindset of what people are willing to do.” For example, he explains. “If I know I can get myself there and back when I want to, I’m more likely to go out and thus spend money.”

Of course, he also notes that Lyft drivers also have a positive effect on the local economy. After all, the majority of Lyft drivers are only working this side gig 20 hours per week or less, so they are earning a somewhat significant supplementary income, which they can then turn around and pump back into the local economy.

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