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New Data Explores Revenue and Participation Differences in Driving and Leasing Platforms Across 27 Metro Areas

Average monthly revenues are a reflection of how often drivers or lessors participate, not competition; room for supply-side growth still exists.

April 30, 2019, (Washington, D.C.) – Today, the JPMorgan Chase Institute released new research exploring the variation in revenues and participation across 27 metro areas with an emphasis on driving and leasing platforms as part of the Online Platform Economy.

Notable among the report’s findings is that the drop in revenues over the period of 2013-2018 was not created by rising participation in the Online Platform Economy and there is still room for supply-side growth in the sector. Average monthly revenues generated from the Online Platform Economy are a reflection of how often drivers or lessors participate, and are more influenced by the size of the potential market and availability of customers, rather than by competition from other potential drivers and lessors.

Since 2015, participation in transportation platforms has increased 20-fold, from 0.05 percent to just over 1 percent in 2018. Participation in the leasing sector tripled from 0.05 percent to 0.15 percent. The report, “The Online Platform Economy in 27 Metro Areas: The Experience of Drivers and Lessors” tracks payments directed to 2.3 million families participating in the Online Platform Economy between October 2012 and October 2018 to provide a better understanding of the variability in the Online Platform Economy across 27 metro areas.

“With the pace of technology accelerating and transforming labor markets, it’s increasingly important that we understand these nuanced dynamics at work,” said Diana Farrell, President and CEO of the JPMorgan Chase Institute. “With this information, policymakers, platform companies and participants alike can better plan for an economy of the future where online platform work is continues to play a positive role.”

The findings include:

  • Average monthly revenues generated from the Online Platform Economy are a reflection of how often drivers or lessors participate, and are more influenced by the size of the potential market and availability of customers, rather than by competition from other potential drivers and lessors. In both the transportation and leasing sectors, average monthly revenues per participant are higher in metro areas with more participants, though a number of metro areas stray from this pattern.
    • San Francisco was the highest revenue area ($1,508 per driver in October 2018), and Charleston, WV the lowest ($378 per driver). The highest revenue cities including San Francisco, San Jose, New York, and Seattle are also the cities with the most engaged drivers. Cities with very high rates of participation but low revenues like Las Vegas and Atlanta have relatively low levels of driver engagement.
      • Driver participation rates in New York are similar to those in Los Angeles, Chicago, and Denver but average monthly driver revenues are 20-25 percent higher. Participation rates in Seattle and Portland are similar, but driver revenues in Seattle are more than 45 percent higher than in Portland.
      • Atlanta stands out—participation rates in Atlanta are as high as those in San Francisco, but driver revenues are among the lowest across the 28 areas
    • Driver and lessor participation grew in every city between 2013 and 2018, but some areas grew more than others.
      • In the transportation sector, participation rates increased the most in Las Vegas (1.8%) and the least in Detroit (0.5%) from 2013-2018. In 2018, San Francisco, San Jose, New York, and Seattle had the highest revenues and were also the cities with the most engaged drivers.
        • If one metro area has a participation rate 0.1 percentage point higher than another, then average monthly revenues were also about $37 per month higher.
      • In the leasing sector, participation rates increased the most in New Orleans and Denver (0.23% in both cities) and the least in Charleston, WV (0%) from 2013-2018.
        • Average monthly leasing revenues in October 2018 totaled $2,929 in New Orleans, $1,396 in Louisville, and $928 in Charleston, WV. New Orleans and Portland had the most engaged lessors (over 20%), whereas Dallas, Detroit, and Oklahoma City had the least engaged lessors (less than 8%).
    • Local-area characteristics, such as the prominence of incumbent industries, local labor market conditions, and policy decisions, may explain some of the cross-metro variation in platform participation and revenue.
      • Metropolitan areas with larger incumbent transportation and leasing industries prior to the emergence of the Online Platform Economy have higher participation and revenues in these platform sectors.
        • Platform activity accounted for a negligible fraction of the transit subsector of GDP in all cities in 2013, with the arguable exception of San Francisco, where many of the transportation platforms first launched. If the transit subsector accounted for 0.1 percentage point more of one metro area’s total GDP than that of another metro area in 2013, then five years later, participation on transportation platforms was also 0.1 percentage point higher and revenues $19 higher.
      • Although families are more likely to turn to transportation platforms to generate income when they do not have a traditional job, the rate of participation is still sufficiently low that this does not add up to a macro-level trend.
        • Driver participation rates are similar in areas with lower employment-to-population ratios to those with higher ratios. Similarly, average monthly driver revenues do not vary with employment-to-population ratios

      This report builds on the 2016 JPMorgan Chase Institute Online Platform Economy dataset, and the 2018 report “The Online Platform Economy in 2018: Drivers, Workers, Sellers, and Lessors” to identify levels and trends in supply-side participation and earnings. The research is built on a sample of 39 million checking accounts, from which we tracked payments directed through 128 different online platforms to 2.3 million families between October 2012 and October 2018.

      To identify trends and differentiate the types of work taking place in the platform economy, the JPMorgan Chase Institute identified four different platform sectors:

      1. The transportation sector, in which drivers transport people or goods;
      2. The non-transport work sector, in which workers offer a growing variety of services including dog walking, home repair, telemedicine, and many others;
      3. The selling sector, in which independent sellers of goods find buyers through online marketplaces; and
      4. The leasing sector, in which lessors find lessees to rent homes, parking spaces, and many other types of assets.

      Click here to read the full report.

      About the JPMorgan Chase Institute
      The JPMorgan Chase Institute is a global think tank dedicated to delivering data-rich analyses and expert insights for the public good. Its aim is to help decision makers–policymakers, businesses, and nonprofit leaders–appreciate the scale, granularity, diversity, and interconnectedness of the global economic system and use better facts, timely data, and thoughtful analysis to make smarter decisions to advance global prosperity. Drawing on JPMorgan Chase & Co.’s unique proprietary data, expertise, and market access, the Institute develops analyses and insights on the inner workings of the global economy, frames critical problems, and convenes stakeholders and leading thinkers. For more information visit: JPMorganChaseInstitute.com