PROVIDENCE, R.I. [Brown University] — The ridesharing company Uber has become a poster child for the sharing economy. Just about anyone with a driver’s license and a car can turn those assets into a money-making venture — one in which drivers are told they can make their own hours and be their own bosses.
To Patrick McQuown, an adjunct lecturer in Brown’s School of Engineering, that sounds like an appeal to entrepreneurship, and Uber itself has referred to drivers as “transportation entrepreneurs.” McQuown and Brown professor Barrett Hazeltine, who co-teach an entrepreneurship class, thought taking a deep dive into Uber’s business practices would be a good chance to teach students about entrepreneurship in the sharing economy.
So McQuown and a group of 89 students from the class performed a case study of Uber’s driver model, which the students compiled for their final class project. The results were a bit surprising. They conclude that Uber’s business model for drivers might not be as entrepreneurial as it seems.
Getting behind the wheel
For years in Hazeltine’s class, students have read prepared case studies on various business situations and presented for their final exams recommendations on how companies could manage them. This year, McQuown and Hazeltine took a different approach and gave students a chance to prepare their own case as a final project.
Uber seemed like an ideal subject. Like eBay, Etsy and Airbnb, Uber is often cited as a major force in the new and growing sharing economy, which lets individuals turn their cars, interests, hobbies or even their spare bedrooms into businesses. Uber riders can summon a car with a press of a button on a smartphone app. Drivers on the other side of the app field those requests and get the riders where they want to go. Payment is handled through the app where riders’ credit cards are on file. No cash needs to change hands.
For the class, Uber offered an opportunity to learn how the business works from the drivers’ perspectives firsthand.
McQuown is no stranger to either entrepreneurship or the sharing economy. He started a text message company in his college dorm room and sold it eight years later to the telecommunications firm Softbank. He also sits on the board of advisors for Rally, a company that connects people who are going to the same place and provides buses to get them there.
“I said to Barrett, ‘Why don’t I take the summer break, become an Uber driver and make a case study out of it?’” McQuown said. “That was the genesis.”
McQuown ended up logging about 400 hours and 8,000 miles behind the wheel, documenting his experience along the way. When the semester started, McQuown and Hazeltine asked for students join the project. The 89 students who signed up split into teams and interviewed more than 100 Uber drivers to bolster McQuown’s firsthand account.