(8) Diffusion of Innovation

 The Innovation of the Sharing/"Gig" Economy Tailored to Ride Shares 

From the worries of getting into a taxi to today's society with ride-share apps, there has been an enormous change in trust and reliability through the diffusion theory. Before COVID, you would be scared to be in someone's car in a city, but now you see young teenagers hopping in the back of a car on their way to the next destination. 

What is the sharing/"gig" economy? 

A labor market for individuals who are able to work anytime, anywhere, as a temporary job to make extra income. With the rise of the gig economy, many young adults and the boomer generation are using this market as a way to start making income instead of getting a 9-5 job. Along with that, they can have a flexible schedule and be independent. 

Diffusion of Innovation Theory

As we discussed in class, the theory involves five main groups. Pioneers, early adopters, early majority, late adopters, and the laggards. With each group, they work together to build today's society. 

Wave of Innovation

Pioneers: They are the critical thinkers who innovate and are the beginning of the experience phase. They are usually the risk takers.

Early Adopters: The bridge between the general population and the risk takers is the early adopters. The "word-of-mouth" opinion-based leaders who draw attention to the innovation and spark the uptake phase in this innovation wave.

Early Majority: Careful decision makers who are open to new innovations but are highly concerned about the early adopters' decisions. This starts the tipping point in the innovation wave.

Late Adopters: People who want to be like everybody else. Followers. They usually adapt to what is good or a "trending" product on social media.  This is the maturation aspect of the innovation wave. 

Laggards: These individuals are usually boomers adapting to Gen-Z innovations like the online web. They are more traditional and don't really care about the latest product or top-tier products.

The Diffusion of Innovation Theory in action

Ride-sharing services like Uber and Lyft are highly adopted by the diffusion of innovation theory. By exploring the different stages from pioneers to laggards, we establish a better understanding of how ride-sharing spread widely through different demographics and cultures. It provides us with key information like why individuals adapted to ride-sharing or resisted it after COVID.

Pioneers & Early Adopters: With the small percentage of individuals in this category, we often categorize them as tech-savvy, and mostly in the younger generations, they crave the "new" innovations leader position.  

Early majority: As early adopters, their focus was to see if ride-sharing was reliable, cost-effective, and socially acceptable. With COVID interfering with social interactions, ride-sharing was one of the solutions for people to reinteract with others in their community. Health and safety standards were still there, but it gave a sense of comfort to see other people after the COVID restrictions. This also grew trust in user ratings and safety protocols.

Late majority: In this circumstance, with the increase of social interactions, ride-sharing gained popularity and resulted in the overwhelming adoption of ride-sharing. Whether it was being the driver or the passenger, ride-sharing brought job opportunities. It was the mass influence that drove customers from taxis to apps like Uber and Lyft. The cost of each ride decreased with the use of these apps. From a taxi service paying it in cash and worrying about availability to getting the nearest driver on Uber, the rates and reviews skyrocketed. 

Laggards & Non-Adapters: With Laggards and non-adapters, it is a choice/opinion that involves trust issues, privacy breaches, cultural and demographic barriers, and/or personal preference. Everybody has trust issues, and trusting a random stranger you just met could be worrisome. For data privacy and app permissions, people are being vulnerable without knowing where their information is going. As older generations try to stay away from technology, this can create a barrier that restrains them from being able to use these apps.

Advantages vs. Disadvantages

From the driver's point of view, ride-sharing is convenient when it comes to schedules. You can work when you want and where you want to go with each ride. The apps are very accessible to use and are very flexible when it comes to operating hours. Not like a 9-5 job, Uber, Lyft, and other ride-sharing apps are available 24/7 with drivers from all around the world. One thing I like about these apps is the great communication that is incorporated within the app. You can message, locate, and call your driver to see how far they are, and if they need further instructions, you can give them.

From a passenger's point of view, there is the financial benefit and the convenience of finding a ride promptly. According to Robert Farrington's case study, it showed that he spent $200.36 per month on transportation. If you continue to ride Uber, you could eventually save a lot to put a down payment on a car. It was convenient for him to ride Uber instead of owning a car because of the car's deterioration and the constant fixes/parts he needed to buy to keep his vehicle in check and safe for his family.

Some downsides of ride-sharing include labor concerns, market distribution, environmental concerns, and technology dependence. When working with Uber as a driver, you do not qualify for unemployment insurance benefits or workers' compensation. You also must pay a self-employment tax to cover full social security and medicare taxes of 15.3% per worker, whereas W-2 workers pay half the price and their employers pay the rest. Creating these apps also disturbed traditional taxi services. Uber's flexible labor supply model and surge pricing more closely match supply with demand throughout the day, while taxi services couldn't match Uber's efficiency. According to T&E, Ride-hailing trips now result in an estimated 69% more climate pollution, on average, than the trips they displace.

Cost-benefit analysis with new technology like the gig economy on the rise

These ride-sharing services address a real problem—poor public transportation and, in some areas, a lack of transportation as a whole. However, using these services comes with doubts, including the cost of time and money, and the potential loss of your privacy. While it may offer a short-term convenience, relying on it too much can lead to long-term dependency, which causes side effects like a lack of physical activity, poor connection with your community, and an increase in screen time. Before fully committing to these services, it is worth considering alternatives like carpooling with friends, biking, or taking other types of public transportation.

Reflection

All in all, the adoption of new technology isn't just about innovation, but it's about values, lifestyle, and timing. Ride-sharing is a prime example of how innovation spreads, but also the effects it has on society from both perspectives. Whether it's an app for transportation or social interaction, technology comes with risks. Each individual's choice to be a part of this innovation or not is shaped by more than its convenience.