Uber’s Economic Impact in Sri Lanka
2024
Executive Summary
Since launching in Sri Lanka in 2015, Uber has offered drivers and delivery partners flexible, reliable earning opportunities, whilst also transforming the lives of consumers.
By making transportation and delivery services more convenient, safe, and affordable, the company has helped to generate economic growth during a period of significant financial uncertainty and inflation across the country.
Overall, we estimate that Uber and Uber Eats supported Rs. 160 billion of additional economic activity in Sri Lanka in 2024.
Transforming Travel
Uber provides safer, convenient, and affordable transportation options that help people get around. Over the last few years, Uber’s auto and motorbike services have also grown in popularity, providing all Uber’s flagship features at more affordable prices.
Uber provides reliable, comfortable, and convenient travel.
80% of riders agree that the Uber app is an important transportation innovation.
Many Sri Lankans turn to Uber for essential trips.
of riders say they have used the Uber app to get somewhere in an emergency and 79% of riders have used Uber to commute to or from work over the last year.
Connecting Customers to Local Businesses
By allowing people to utilize their smartphones to take charge of their mobility and deliveries, app-based rideshare and delivery services have forever changed the way in which people interact with their local area.
Uber Eats helps consumers support the local economy.
In 2024, we estimate that Uber Eats supported Rs. 3.6 billion in additional value for restaurants and merchants in Sri Lanka that they would not have earned through other channels.
Uber Eats helps consumers to discover smaller businesses.
Uber gives tourists more confidence to visit local sites.
In 2023, we estimate that Uber created Rs. 16 billion of additional economic activity for the Sri Lankan tourism industry.
Uber creates a further spillover impact for local mechanics.
Uber creates a further spillover impact for local mechanics. We estimate that Sri Lankan drivers and delivery partners paid over Rs. 660 million to local businesses in order to maintain their vehicles in 2023.
Expanding Opportunity
During periods of high unemployment, Uber has enabled drivers and delivery partners to supplement their incomes and provides a financial buffer for many families struggling with the effects of the economic crisis.
Uber creates new earning opportunities for thousands of drivers and delivery partners.
We estimate that driver and delivery-partners earned an additional 24% in higher income through Uber in 2024, relative to their next best alternative type of work.
Uber helps drivers and delivery partners to support themselves and their families.
drivers and delivery partners say that operating on the Uber app has helped their family during the economic crisis.
Uber offers a more structured and stable way to earn money.
of drivers and delivery partners said that Uber has given them a sense of stability that they wouldn’t have had without using the platform.
Safety Features
Uber’s revolutionary safety features including GPS tracking, ratings and pin verification help protect both riders and drivers, and build trust in the app-based economy.
Uber helps riders feel safe while traveling.
83% of riders said safety is very important in why they choose to ride with Uber and 80% of riders say that Uber is the safest way to get home at night.
Uber has introduced a range of additional safety features to its services.
In our polling, we found widespread awareness of features such as “Share My Ride” or the emergency assistance button among both riders and drivers, and a belief that they were helping make each ride safer.
Uber plays an important role in making roads safer.
71% of users agree that Uber and similar ridesharing services have contributed to a reduction in impaired driving due to alcohol within their communities.
Introduction
The Platform Economy is helping Sri Lanka’s economic recovery
Sri Lanka has faced unprecedented economic challenges in recent years, resulting in a crisis that has tested the resilience of its people and institutions. This has had knock-on effects on the country’s crucial tourism sector, previously labeled as an “engine of growth” for the Sri Lankan economy.1
As the nation grapples with these economic headwinds, the platform economy – including services provided by Uber and Uber Eats – has become a beacon of opportunity for Sri Lankan people.
In Sri Lanka, the platform economy is:
- Offering convenience, reliability and safety. App-based innovations have empowered Sri Lankans to travel with greater confidence, whilst accessing affordable food and essentials at the touch of a button.
- Helping businesses reach new consumers. Apps including Uber and Uber Eats have opened new avenues for businesses to connect to domestic and international customers.
- Creating flexible income for drivers and delivery partners. The app-based economy offers flexible, reliable earning opportunities that often provide a crucial financial buffer for families struggling with rising costs of living.
In combination, the wider economic benefits of these platforms extend beyond individual riders, drivers and delivery partners. Uber and Uber Eats contribute to the island’s resilience, laying the groundwork for economic recovery and growth.
In this report, Uber commissioned Public First to better understand and quantify the impact the Uber and Uber Eats apps have in Sri Lanka. We used a mixture of methods to explore Uber’s impact, including:
- An in-depth nationally representative consumer poll of 1,006 online adults to explore Sri Lankan travel and food ordering habits.
- An anonymous survey of over 672 drivers and delivery partners, asking them about their experience and the reasons why they chose the Uber and Uber Eats apps.
- New quantitative models of the economic impact, time saved, consumer surplus and driver value created by Uber and the wider platform economy, building off the data from Public First’s poll and data provided by Uber.
To fully understand Uber’s impact in Sri Lanka, Public First has performed a range of different calculations to capture all of Uber’s economic contributions. This considers driver, delivery partner and merchant earnings through the Uber and Uber Eats apps, as well as the wider indirect and induced multiplier effects created throughout the platform’s activities.
We found that the direct and spillover value associated with the Uber and Uber Eats apps help to ensure the country’s growing prosperity. Overall, we estimate that Uber and Uber Eats supported Rs. 160 billion of additional economic activity in Sri Lanka in 2024.
Transforming Travel
Uber provides reliable, comfortable and convenient travel
The app-based economy has transformed daily life in Sri Lanka. Sri Lankans rely on the convenience and reliability of Uber for a wide range of essential journeys, from daily commutes to evenings out. According to our survey:
of riders agree that the Uber app is an important transport innovation.
of riders say that using the Uber app is often the quickest way to research their destination.
of riders say the Uber app has made it easier to get around their city.
When asked why they chose the Uber app, consumers were most likely to say safety, time saved and cost.
How much value does Uber create for consumers?
One of the most important measures of economic welfare is known as “consumer surplus”. This is a standard measure of the consumer welfare created by a product, service or organization.
In simple terms, it is the difference between the price the consumer is willing to pay for a service, and the price they actually pay for a service. Services with a high consumer surplus are implicitly playing an important role in people’s lives, because we would willingly pay more than the asking price to keep using them.
In order to understand this metric for Uber’s services in Sri Lanka, we asked consumers how much they would have to be compensated to lose access to the Uber app for the next month.
We estimate that Uber and Uber Eats together produced Rs. 338 billion in consumer surplus for Sri Lankan riders in 2023.
Many Sri Lankans turn to Uber for essential trips
The speed and reliability of Uber services compared to other forms of transport makes it a particularly attractive travel option for life’s critical moments. Whether it’s a longer trip in an air-conditioned car, or a short Moto or Auto ride from home to the nearest public transport hub, Uber facilitates essential trips in multiple different ways.
According to our research:
of riders have used Uber to get somewhere fast in an emergency.
of riders have used Uber to support an elderly or disabled relative.
of riders have used Uber to travel in extreme weather.
Uber is often an important option for work trips too, where reliability, time saved, and comfort can matter. 79% of riders have used Uber to commute to or from work over the last year, with 30% doing this at least weekly.
By saving riders time, Uber is helping to raise their productivity. In total, we estimate that Uber saves riders over 1.2 million hours a year. This is equivalent to Rs. 1.5 billion in efficiency gains across Sri Lanka’s workforce.
What are the most important reasons why you normally use the Uber app?
Uber is transforming the auto and moto market
Given the congestion in many Sri Lankan cities, a 4-wheeler car is often not the fastest way to reach a destination. Alongside enabling regular car and long-distance transportation services by connecting riders with drivers, Uber also offers dedicated two-wheeler (Uber Moto) and three-wheeler options (Uber TukTuk). According to our polling, 36% of riders have used Uber Tuk while 88% of Uber riders have booked Uber Moto in the last year.
The convenience of these services, with the safety features and upfront pricing of the Uber app, encourages many people to try them who would not have done so in the past. In our polling, we saw how these options were appreciated by many riders when they needed to cover short distances or cut through traffic.
of riders agree that having different Uber services makes it easier to book a ride within their budget.
of riders agree they are more likely to get a lift in a Moto vehicle now they are included on the Uber app.
of riders have ordered an Uber Moto in the past in order to save money.
Uber Moto and Uber Auto have both grown substantially as part of Uber’s overall offering and are now powering significant spillover economic impact on their own.
Uber complements other forms of transportation
While public transportation options are available in urban areas in parts of Sri Lanka, those in more rural areas often struggle with reliability, coverage, and quality of service. Many riders therefore use the Uber app due to a lack of public transport options, or use Uber to connect to other modes of transport, filling gaps in the transportation network.
of riders say a lack of public transport is an important reason to use Uber.
of riders have used the Uber app to get somewhere where public transit was inconvenient.
of riders have used Uber to connect with public transport in the last year.
Sustainable Mobility in Sri Lanka
Uber Green
In Colombo, the capital of Sri Lanka, Uber Green lets riders choose an EV for a more sustainable ride. In line with Uber’s global goal to transition to zero emission mobility by 2040, Uber has expanded its on-demand EV offering to Sri Lanka.
Deliveries on E-Cycles
In 2022, Uber became the first platform to introduce cycle deliveries in the country and in 2023 launched a fleet of e-cycles especially designed for deliveries and made by Sri Lanka’s largest cycle manufacturer.
Connecting Customers to Local Businesses
Uber Eats offers easy access to food and essential items
Uber Eats provides an easy way for Sri Lankans to order food and other essential items from merchants in their local area. According to our research, users are able to affordable and diverse options to suit their needs:
of users have used the app to order food they wouldn’t normally cook at home.
of users say they can find items on Uber Eats that work for their household budget.
of users say the availability of food delivery apps has increased the amount of food they order.
When asked, Sri Lankans particularly identified quick delivery times, good service and convenience as important reasons why they use the Uber Eats app.
Uber Eats helps consumers to support the local economy
By improving access to food and other essential items, delivery apps generate additional economic value for local restaurants and shops. This is because the Uber Eats app helps users to discover new restaurants and retailers, and share their spending power more widely.
of users say that food delivery apps have made it easier to discover new restaurants.
of users have ordered from a restaurant they have never dined at before.
of users have ordered from a small or family-owned restaurant.
Indeed, food delivery platforms boost the ability of restaurants and merchants to serve a greater number of customers in a number of ways:
- Diverse Income: Restaurants and retailers benefit from additional revenue streams without having to expand their physical footprint. This can sustain businesses during off-peak hours or when their physical capacity reaches its limits.
- More Orders: Apps like Uber Eats provide customers with the convenience of ordering from their favorite restaurants and retailers without leaving their homes. This can lead to increased order frequency and higher sales volumes for merchants.
- New Customers: Merchants can reach more customers via the Uber Eats app. Users scroll through a variety of different providers, discovering new businesses in the process. This is particularly useful for SMEs that may not have the resources for extensive marketing campaigns.
- Logistical Support: The Uber Eats app handles logistics, such as order processing and delivery. This allows staff to focus on food preparation and in-house customer service. This can lead to more efficient operations and a better overall customer experience.
- Data Insights: Restaurants and retailers gain access to valuable data on customer preferences, peak ordering times and popular items. Merchants can use these insights to optimize their offers, improve customer service, and tailor their business strategy to better meet customer needs.
By leveraging the reach, convenience, and operational support of food delivery apps, merchants can enhance their revenue potential and grow their businesses more effectively. We estimate that the Uber Eats app supported Rs. 3.6 billion in additional value for merchants in Sri Lanka in 2024 that would not have been earned without Uber Eats or other food delivery apps.
By increasing mobility, Uber creates a further spillover impact for local enterprises
Moreover, by making it easier for consumers to get about, the Uber app encourages people to visit more local shops, restaurants, and bars:
of riders use the Uber app to go shopping at least once a month.
of riders use the Uber app to go to a restaurant at least once a month.
of riders agree that having options like the Uber app available make them more confident in staying out late.
There are also significant spillover benefits for businesses that support the app-based economy. The costs drivers and delivery partners pay to support and maintain their vehicles help to raise the revenues of many other Sri Lankan businesses. For example, in 2023, we estimate that Sri Lankan drivers and delivery partners paid over Rs. 660 million to local businesses in order to maintain their vehicles.
Uber gives tourists more confidence to travel and explore local sites
Sri Lanka’s travel and tourism sector is forecast to rise to 11.5% of GDP by 20332 and, since 2015, Uber has helped tourists explore the county’s ancient temples and pristine beaches with safe, convenient and affordable transportation options.
By providing direct, reliable connections between airports, railway stations, hotels, and cultural landmarks, alleviating the hassle of understanding complex public transport networks or haggling over a fare, Uber is seen as the best option for many domestic and international visitors.
In 2023, we estimate that Uber supported Rs. 16 billion in additional economic activity for the Sri Lankan tourism industry.
Expanding Opportunity
Uber creates new earning opportunities for drivers and delivery partners
While many in Sri Lanka have struggled with rising costs of living and rising unemployment, Uber and Uber Eats offer drivers and delivery partners a flexible and reliable source of income.
of drivers combine their app-based work with other responsibilities of some kind.
of drivers say that the flexibility provided by app-based work makes it easier to balance family and work responsibilities.
of drivers say that they earn as much or more from operating on the Uber platforms as from other or past jobs.
Uber helps drivers and delivery partners to support themselves and their families
Uber has enabled drivers and delivery partners to supplement their incomes and provide a financial buffer when many families are struggling with the effects of the economic crisis.
At a time when finances are tight, we estimate that drivers earned an additional 24% in higher income through Uber in 2024, relative to their next best alternative type of work.
This has allowed drivers to better support themselves and their dependents to navigate financial difficulties:
of drivers say that operating on the Uber app has helped them to make additional income during the national fuel crisis.
of drivers say that operating on the Uber app has helped during the rising costs of goods and services.
of drivers say that operating on the Uber app is more profitable than other types of informal work.
What do you like most about driving through the Uber app?
Uber offers a more structured and stable way to earn money
As part of our driver survey, we asked those who had previously worked outside a platform about how they found the change. 74% of drivers and delivery partners said that they prefer driving or delivering Uber than before when they were driving or delivering without a platform.
In particular, drivers and delivery partners appreciate the formal benefits and accidental insurance that are offered by the Uber platforms, and report a greater sense of stability compared to before.
of drivers and delivery partners say that driving with Uber and delivering with Uber Eats has given them more formalized benefits than if they drove without the platform.
of drivers and delivery partners feel more comfortable driving for Uber and delivering with Uber Eats, knowing that they are insured by Uber in case of an accident.
of drivers and delivery partners say that operating on the Uber and Uber Eats apps has given them a sense of stability that they wouldn’t have if they drove without using the platform.
Safety
Uber helps riders feel safe while traveling
It is critical that people feel confident navigating their local area – especially when they are on their own or going out late at night. Across our research, safety was one of the main reasons that men and women chose to use ridesharing apps to reach their destinations.
of riders say that safety is very important in why they chose to use the Uber app.
of female riders agree that the “share my ride” function makes them feel safer.
of riders say that Uber is the safest way to get home at night.
What do you like most about driving through the Uber app?
Uber has revolutionized transport safety features for both riders and drivers
To protect both riders and drivers, Uber has developed revolutionary safety features. This is particularly relevant for women, who cite Uber’s security features—like GPS tracking and the “Share My Ride” function—as critical in ensuring they feel safe when traveling.
GPS Tracking
Each Uber ride is tracked live on maps, allowing passengers to follow the travel route in real time and notice any issues.
Share my Ride
This function allows users to share their trip details including route with a friend or family member.
2-way ratings
Drivers and riders rate each other on the app following the ride, incentivizing appropriate behavior on the part of both.
Emergency Assistance Button
First rolled out in 2015, the feature connects riders and drivers to contact the local police authority while remaining inside the app, and automatically alerts regional support teams.
Ridecheck
This feature recognizes when a trip takes an unexpected turn or abruptly stops before the rider reaches their intended destination.
PIN Verification
An added safety feature that you can use to make sure you’re getting into the right vehicle.
Driver Background Checks
Introduced in 2015, Uber runs formal background checks, verification of character by the local police and checks to detect fraud in driving and vehicle permits for every new driver.
Our research demonstrates how Uber’s safety features give riders additional confidence when traveling to their destination, with 73% of riders reporting that they choose Uber because it feels safer than street hailing.
Uber’s commitment to safety also extends to drivers. In our polling, we found widespread awareness of these features among drivers, and a belief that they were helping keep people safer.
Uber plays an important role in making roads safer
Beyond personal safety, Uber plays an important role in improving road safety. Ride hailing apps provide a straight-forward way for adults to get home if they have been consuming alcohol. Indeed, 23% of adults reported using the Uber app after themselves consuming alcohol, whereas 71% agree that Uber and similar ridesharing services have contributed to a reduction in impaired driving due to alcohol within their communities.
Methodolgy
Opinion Surveys
Polling for this report took place between May and June 2024. It included a nationally representative poll of 1,006 Sri Lankan consumers (“2024 Public First Consumer Survey”), available in English and Tamil, as well as a poll of 672 Uber drivers and delivery partners (“2024 Public First Driver Survey”).
Economic impact
Our total economic impact is calculated as the sum of:
- The earnings of drivers using the Uber App and delivery partners using the Uber Eats App.
- The indirect and induced supply chain impact of driver and delivery partner spending to buy, run, and maintain their vehicles.
- The induced impact of spending by drivers and delivery partners through their earnings from Uber’s platform.
- The additional spending by Uber riders in local businesses, driven by the increased ease of transport.
- The additional spending by Uber Eats users in local businesses, driven by the increased accesibility of foods and goods.
- The value of the time saved using Uber and Uber Eats.
Uber provided data on driver vehicle types, as well as data on how often different vehicle models were used in trips. We used this data to allocate trips that took place on Uber Auto, allowing us to identify separately the estimate for the economic impact it created.
This measure is a gross estimate, looking at the total amount of economic activity supported by Uber in Sri Lanka. It does not attempt to measure what would happen in a hypothetical scenario where Uber no longer exists. Our modeling does not include the impact of Uber’s direct investment or employment footprint as a company or any spillover effect this has on the wider tech ecosystem.
Impact of Driver Spending On Vehicles
To estimate average spending by drivers on vehicles, we drew on two main sources:
- The Public First 2024 Drivers Survey of 1,006 Uber drivers and delivery partners, asked them in detail their average spending on different categories, including purchase, insurance, cleaning, and maintenance.
- Uber provided us with data on the most common vehicle types, which covered over half of all trips in Sri Lanka on the Uber App in 2023. This allowed us to estimate the average purchase price, fuel efficiency insurance and maintenance cost of vehicles using 3rd party sources.
In order to work out the wider supply chain impact of this spending, we multiplied these amounts by Type 1 and Type 2 multipliers, derived from an input-output table.
Impact of Additional Spending on Local Businesses
To estimate this, we added up:
- Additional spending from domestic riders. To estimate this, we drew on the Public First 2024 Uber Driver Survey, where we asked them how often they used Uber for different purposes, and how likely they would have been in each case to make the trip if Uber didn’t exist. The overall number of trips was calibrated with data provided by Uber on the total number of trips in Sri Lanka in 2023, uprated to 2024 using 3rd party estimates of market size. We then combined these with estimates on average spend for different types of activity, and an economic multiplier to take account of wider spillover activity.
- Additional spending from international visitors. We drew on the estimates of Kim et al (2021) on the relative impact of Uber on average tourist spending, combining this with UN data on overall international tourist spending within Sri Lanka.
Impact on Merchants
The model utilises Uber’s internal data on the total payout to restaurants via Uber Eats. We estimate the proportion which is additional using the average of consumer polling undertaken by Public First, Collison’s (2020) estimated range of the proportion of dollars spent on food delivery apps that are incremental, and figures from Deloitte’s “Delivering Growth” (2019).
Following standard input-output methodology, we used input-output tables to estimate Type 1 and Type 2 output multipliers for restaurants in Sri Lanka. These multipliers are used to estimate the total impact via restaurants UberEats has on the economy.
Value of Time Saved
In the 2024 Public First Consumer Survey, we asked riders for the duration of their most recent trip with Uber, and how long the next best alternative would have taken. We combined this with existing Public First data on the average time saved using the Uber app, and calibrated against Uber’s internal data regarding the average duration of trips in Sri Lanka.
We then multiplied the average time savings with Uber’s internal data on the total number of annual trips. This allowed us to estimate total time saved per year. Finally, we then calculated the monetary value of this using average hourly salary based on reported incomes from the same survey.
Increase in Driver Earnings
Uber provided Public First with data on total gross driver earnings in Sri Lanka. We used data from 2023 and applied growth factors calculated using 3rd party estimates of market size to estimate driver earnings for 2024. In order to calculate additionality, we combined this estimate with data from the 2024 Public First Drivers Survey in which we asked drivers to estimate how much more they earned on average through the Uber platform than they would have done so through their next best alternative.
Consumer Surplus
The consumer surplus of a product or service is a measure of the increase in consumer welfare it creates. It represents the monetary value of a product or service, beyond and above the amount that has been paid for it.
Following the methodology of Brynjolfsson, Collis and Eggers (2019), we asked riders in the 2024 Public First Consumer Survey a single discrete binary choice question in the form to allow us to estimate the consumer surplus of Uber in Sri Lanka:
“Now imagine you had to choose between the following options. Would you prefer to keep access to [Uber for ride-share] or go without access to [Uber for ride-share] for one month and get paid RX?”
The price offered was randomized across a range. We then computed both a linear regression of the results of this poll to derive a demand curve and the average consumer surplus per user, before multiplying by the overall number of Uber users in Sri Lanka.