Some useful data from the US market from INSHUR;
INSHUR, announces its findings from Driving the On-Demand Economy in the US, the first and only report to survey Americans who drive for on-demand rideshare and delivery apps including Uber and DoorDash.
Since 2020, buying behaviors have shifted significantly in favor of at-home purchasing options. As such, the global on-demand economy is expected to reach $335 billion by 2025, according to PwC research. INSHUR’s report finds that nearly three in four drivers (73%) say they are driving longer hours than a year before – with 44% saying they are now driving twice the number of hours.
When we think of a taxi or delivery driver, many of us still think of a man. However, according to INSHUR’s findings, almost half (49%) of on-demand drivers are female, and women make up a significant majority (65%) of 18-24 year old drivers. Overall, Millennial and older Gen Z drivers lead the pack, with 37% of all drivers aged 35-44 years old, and 30% aged 25-34. Encouragingly, three quarters (74%) of on-demand economy drivers say they are satisfied with their work-life balance, with 38% saying they are very satisfied – suggesting that drivers feel they are achieving control when driving for on-demand apps.
Drivers’ hours are increasing significantly, showing a boom in entrepreneurialism
INSHUR’s data indicates that the majority of on-demand economy drivers drive part time or as a supplement to other incomes. While almost a fifth (18%) of drivers say they drive over 151 hours per month – equivalent to a full time job – over half of drivers (52%) drive under 50 hours per month. Three quarters (77%) of on-demand drivers are also employed, most commonly in retail (16%), technology (12%) and construction (9%).
While nearly three in four drivers (73%) say their hours have increased since December 2022, and 44% now driving twice the number of hours, men are significantly more likely to drive more than 100 hours per month than women (34% vs 27%) – suggesting that driving is, more often, their main source of income. Just under a quarter (73%) of women drive fewer than 100 hours per month – equivalent to 12.5 days a month, or 3 days a week – falling to 66% of men, suggesting women are more likely to drive around other responsibilities and at weekends.
The ability to make money on their own terms and in their chosen hours means there is a spirit of entrepreneurialism amongst all on-demand economy drivers: by far the largest proportion of drivers (66%) say they choose to drive for on-demand apps because of the flexible working hours on offer. But as on-demand driving gains exponential growth, so does the opportunity to nurture drivers to become de-facto business owners in what can be an extremely rewarding industry.
Drivers from underrepresented ethnic groups are disproportionately supporting the ever-increasing demand for on-demand services: they are significantly more likely than White drivers to have doubled their hours driving for on-demand apps in the past year (49% vs 39%). Over half of Black or African-American drivers (52%) say their hours have more than doubled in just one year.
Job satisfaction is high for on-demand economy drivers – and they like meeting people
After the ability to work flexibly, on-demand economy drivers say they choose to drive for job enjoyment/satisfaction (37%) and better pay than other available jobs (31%).
Men are ten percentage points more likely than women (36% vs 26%) to say that they started driving for on-demand apps because the pay is better than other roles available to them. Dallas-based drivers (45%) are also the most likely, of all the cities, to say this is why they started driving, while also being the most likely city residents to say that driving offers them opportunities when they lack the skills for other roles (24%). Over a quarter (27%) of EasyTaxi drivers started driving after they were laid off.
It’s a different story for New Yorkers, where a third (30%) of drivers say they drive to meet new people. Hispanic and Latino drivers are also most likely to value meeting people as a real benefit of driving for on-demand apps, at 24%.
Delivery vs Rideshare apps
Of the most popular on-demand apps, drivers INSHUR surveyed are most likely to drive for Doordash (63%), Uber Eats (47%) and Uber (45%). Those working in delivery tend to work fewer hours than those in rideshare, suggesting that those looking for more flexible driving options are more likely to turn to delivery driving.
Over half (52%) of delivery drivers drive fewer than 50 hours per month, vs 47% of rideshare drivers – and while 20% of rideshare drivers drive more than 151 hours per month (equating to a standard full time role), the same is true for only 18% of delivery drivers.
While there are roughly the same proportion of men and women (51% vs 49%) driving for on-demand economy apps, there are differences in the apps they choose to drive for. More than nine in ten women (92%) drive for Delivery apps vs 86% of men, with men more likely to drive for Rideshare apps than women (62% vs 52%). It’s possible that women feel safer in Delivery roles, or find them more accessible.
Money matters
INSHUR found that 43% of on-demand economy drivers are juggling multiple burdens on their finances, especially women, with only 5% saying they have no burdens on their finances, compared to 9% of men. Almost half of women say that home bills (47%) and rent/mortgage (44%) are their biggest financial burdens, compared to 38% and 37% of men, respectively.
This means that for many, keeping on top of finances is the main motivator for driving. While the ability to work flexibly and job enjoyment are the most common reasons for Americans to choose to drive for on-demand apps, almost a third of on-demand economy drivers (31%) also say that driving offers better pay than other work available to them.
The on-demand economy offers drivers the opportunity to improve their income, when employment options are limited. 15% of drivers say they became drivers after being laid off, rising sharply in Memphis (23%), while 18-24 year olds (18%) and Asian drivers (18%) are the most likely groups to say they drive due to lack of other skills.
Challenges of on-demand driving
More than 8 in 10 Americans believe civility is worse compared to 10 years ago, according to the American Bar Association. According to INSHUR’s data, while more than one in ten (11%) on-demand economy drivers say they don’t experience any issues driving for on-demand apps, the most commonly-identified challenge amongst other drivers is rude or badly behaved customers, with 40% saying this is an issue – rising to 43% in New York, followed closely by Dallas and Houston (both at 42%) and Los Angeles at 41%. At the other end of the spectrum, the Sunshine State lives up to its name, with Floridian drivers being less likely to say rude customers are an issue (28%). Rhode Island is the most likely state to say they have no issues as on-demand app drivers (43%).
Reassuringly, even though discrimination is an unfortunate fact of life for some Americans, 41% of drivers say they have had no discrimination experiences while driving for on-demand apps. However, drivers in large global melting pots such as Los Angeles (38%) and New York City (37%) are most likely to have experienced racist discrimination while driving.
After rude or badly behaved customers, rideshare drivers say their biggest challenge is too many hours spent driving each week (27%) – whereas delivery drivers say it’s poor pay (30%), which is perhaps reflective of differences in tipping culture between rideshare and delivery. In addition, women and older drivers want to make more trips than they currently do: while a quarter (25%) of drivers say there aren’t enough hours for them driving for the on-demand apps, this rises to 27% of women and 33% of over 55s.
Insuring the on-demand economy
To drive for on-demand economy apps, drivers need commercial auto insurance – which varies between Rideshare and Delivery as well as by state regulations, meaning that traditional insurance policies can struggle to satisfy the needs of individual drivers.
Over a quarter (26%) of drivers say that vehicle insurance is one of the biggest burdens on their finances, with 26% of Rideshare claiming that insurance is too expensive. This rises to 25% of Asian and 26% of Hispanic and Latino drivers. 10% of female drivers say that over half of their earnings from driving go towards vehicle insurance, as well as 18% of 18-24 year olds, who typically pay higher premiums and drive fewer hours.
Is there a role for apps to play in resolving this issue? Their drivers think so.
Just over a quarter of drivers (26%) say that on-demand platforms should make efforts to offer better pricing for insurance to their drivers, and 25% say they should also offer help with buying insurance. While women (26%) are more likely than men (23%) to say they need help buying insurance, men are five percentage points more likely than women to say better pricing is a priority for them (29% vs 23%). Native Hawaiian or drivers are the ethnic group most likely to say they need help with buying insurance (50%), with Asian drivers least likely to agree (18%).
It takes both an insurance and technology specialist with a deep understanding of insurance loss ratios and dynamic pricing models to offer personalized insurance products for individual drivers. Underwriting expertise plays a significant role in providing fair insurance products, especially when drivers are switching between rideshare and delivery.
Dan Bratshpis, CEO and co-founder of INSHUR, says: “Rideshare and Delivery drivers are the backbone of this burgeoning economy – what we call the On-Demand Economy – and they are transforming the world of commerce in the US, creating the most profound economic shift in four decades. In order for the on-demand economy to survive and thrive, insurers and on-demand platforms should consider drivers’ feedback carefully and continue to work together to build better commercial auto insurance products for drivers.
“Insurance models need to become more flexible and use data more effectively to enable drivers to access the exact level of coverage they need to match their work and lifestyles. Platforms’ data (such as delivery or trip data), claims and other proprietary datasets such as speed, incidents, driving ability and safety, can help insurers to make sure that coverage is comprehensive and adaptable to the type of work the on-demand driver chooses to do. This helps to mitigate any risk of alienating drivers who have chosen flexibility and financial control over traditional working patterns, as well as delivering insurance products where drivers can easily access them – keeping them on the road and earning.”
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