Economic benefits of peer-to-peer transport services

The concept of the “sharing economy” is widely held as a way to increase resource efficiency, but regulation in many countries risks undermining these potential gains. Uber wanted a report highlighting the benefits of peer-to-peer transport services in the Stockholm area, which could add weight to its arguments in favour of the sharing economy.

We conducted a study on the potential economic benefits of peer-to-peer transport services in Stockholm. We did this in three steps. First, we estimated how a lower-cost competitor to traditional taxi services would affect the demand for transport services. Second, we calculated how this changed demand would alter transport flows in and around Stockholm. Third, we estimated effects of the changing transport flows on the environment, productivity, and urban space, as well as the employment effects of well-functioning peer-to-peer transport services.

We concluded that a well-functioning peer-to-peer transport services would create positive economic benefits for Stockholm. Due to their low costs and ease of use, peer-to-peer transport services are likely to immediately attract demand from other types of transport, and to induce car owners to give up car ownership, thereby reducing the use of private cars. Under conservative assumptions, the combined effect reduces the number of daily car trips by up to 3 per cent and leads to a reduction of the total number of active cars in Stockholm by up to 5 per cent of total. The former effect lowers traffic intensity and congestion, which in turn decreases time spent in traffic, creating a total value for society of up to SEK 870 million per year.

Well-functioning peer-to-peer transport services are also likely to create new jobs. In the short run, a peer-to-peer service creates almost 3,000 full-time jobs, as citizens who normally drive their own car shift to commercial peer-to-peer transport.

Finally, well-functioning peer-to-peer transport services are likely to have an impact on the environment, in particular emissions and land use. Emissions in the form of particle and CO2 pollution decrease when the number of vehicle trips declines, and since vehicles in the peer-to-peer fleet are likely to be newer models (with lower emissions) than an average private vehicle. We estimate, conservatively, that emissions in Stockholm decrease, at an economic value of up to SEK 200 million. The improved utilisation of vehicles will also reduce the demand for parking in the city centre. This will free up space in streets, which can used for other transport purposes.

The study is commissioned by Uber.