Uber Vietnam: A Question of Income

Abstract

Uber's entrance into the Vietnamese market has been controversial and disruptive. The company has faced a multitude of challenges in its attempt to increase market share, while trying to encourage more drivers to sign up for the platform. Given these difficulties, this study aims to investigate the question of income for Uber drivers in Vietnam by (1) comparing full-time and part-time drivers, (2) comparing actual and predicted income, (3) comparing drivers and the average Vietnamese worker, and (4) looking at the behavior of Uber drivers in Vietnam. These four questions will then assess the potential success and feasibility of Uber in Vietnam. This study uses a dataset obtained from Uber drivers and partners in Vietnam that includes over 13,000 observations over 50 weeks. Findings from this paper include (1) part-time and full-time drivers have similar hourly earnings, trips per hour, and ratings, (2) part-time drivers have higher income variance than full-time drivers, (3) full-time drivers are more tenured than part-time drivers, (4) Uber drivers earn more than the average worker in Hanoi and in the state sector, (5) Uber drivers have higher actual earnings than predicted earnings from the financial model, and (6) driver hourly earnings are positively affected by tenure and utilization rate. These findings suggest that the vehicle-financing scheme and Uber could ultimately find success in Vietnam and that similar workers who are willing to work longer hours should look to move into the transportation industry where hourly earnings are higher.