Uber/Lyft drivers earn median $3.37/hour after expenses
Mar 04, 2018, 04:32
A National Bureau of Economic Research study in November 2016 found drivers in six major metropolitan areas earned around $18 an hour, not taking into account hourly costs varying from $2.94 to $6.46 per hour depending on the hours they worked and the vehicle they drove.
The study, based on surveys of over 1,100 drivers and analysis of their fuels and maintenance costs, says that almost three-quarters are not making minimum wage.
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He added that many drivers were effectively borrowing money against the value of their cars and subsidising the ridesharing companies by working for low wages. In fact, researchers found that 74% of drivers earn less than the minimum wage in their state. For each mile driven, drivers incur about $0.30 in costs; however, they are able to claim a Standard Mileage Deduction of $0.54 per a mile on their taxes - a difference that amounts to billions of dollars in untaxed income.
Lyft spokesperson Alexandra LaManna also released a statement on the MIT paper saying: "We will continue to engage with our driver community to help them succeed". Drivers don't lose money due to depreciation until they sell their auto, so driving for Uber can work like a cash advance in some cases.
"While the paper is certainly attention grabbing, its methodology and findings are deeply flawed".
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Other studies and surveys have found greater hourly earnings for Uber drivers, in part because there are numerous ways to report income and to calculate costs and the time and kilometers spent on the job.
The paper also received some scrutiny from Harry Campbell, founder of The Rideshare Guy, an industry blog.
The company suggested one of the survey questions asking drivers to report on-demand activities could have resulted in low figures, because drivers might not have reported total income. "It's quite possible that drivers don't realize quite how much they are spending", Zoepf tells the Guardian. This basically means that they're paying money in long-term to be a driver for these companies instead of earning money.
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