Current Events > After costs, Uber/Lyft drivers average less than $4/hr, depressing study claims

(+) Yeah! (+)

Sad if true...

Since taking over as Ubers CEO, Dara Khosrowshahi has done a lot of talking about his company doing the right thing, and how hes changing its toxic culture. A new study from researchers at MIT might have a bullet point to add to his to-do list. It finds that once costs are included, 74 percent of rideshare drivers are making less than minimum wage and many are losing money.

A working paper from MITs Center for Energy and Environmental Policy Research compared a survey of over 1,100 drivers for Uber and Lyft with detailed vehicle cost information and found that 30 percent of the workforce is actually paying to work after vehicle expenses are taken into account. Overall, their findings paint a bleak picture: The median profit for drivers came out to just $3.37 per hour before taxes.

The researchers used data from Edmunds, Kelly Blue Book, and the Environmental Protection Agency to determine the cost of insurance, maintenance, gas, and depreciation for various vehicle models. Cross-referenced with drivers self-reported revenue, mileage, and vehicle models, that information yielded discouraging results. Stephen Zoepf, a co-author of the paper, told The Guardian that its quite possible that drivers dont realize quite how much they are spending. He said that many drivers are effectively borrowing money against the value of their cars and subsidizing the ridesharing companies by working for low wages. When you combine that subsidy with the billions of dollars in venture capital that these companies are losing each year, Zoepf concludes that this business model is not currently sustainable.

According to the working paper, 74 percent of drivers are earning less than the minimum wage in their states once these costs are included, with the average driver only pulling in $661 of profit per month. For those who are considering working for ride-hailing service, this data should give them pause. Those who already doing it should pay close attention to the papers finding that the median profit is 29 cents per mile. The researchers say that drivers could possibly take advantage of the standard mileage deduction that tops out at 54 cents per mile and declare a loss on their taxes. So while rideshare services are losing billions of dollars, billions more dollars of driver income may be mistakenly getting taxed. Meanwhile, other recent studies have found these companies are just making traffic worse.

from Gizmodo

Ill never understand that business

Why did it randomly become okay to be an unlicensed taxi driver
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good.

I wonder what it is for similar services like those ones where you pick up people's groceries.

GoodOlJr posted...

Ill never understand that business

Why did it randomly become okay to be an unlicensed taxi driver

they have to have a licence. taxi companies charge exhorbent rates and this is the market circumventing that but it is shady that these companies get away with paying their employees so little
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I'm glad I never did that shit

Holy crap

I actually signed up to be an Uber driver, but I think I was doing something wrong and never got assigned to do any rides.
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So it's because of the vehicle expenses? Like wear and tear? Is this much different than taxi cabs then? Like, are prices of taxis that much higher?
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GoodOlJr posted...

Ill never understand that business

Why did it randomly become okay to be an unlicensed taxi driver

Because taxis cost more, so people will look anywhere for a cheaper alternative. Much like sweatshops, this alternative just came at the expense of the workers.
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Metro2 posted...

Khosrowshahi

my friend has one of their bikes
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Umm.. yeah, I'd rather sit around and scratch my ass than work for $4 an hour.

Conflict posted...

Time to start encouraging tipping I guess

pls don't
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one of my coworkers does lyft as a side job and he drives around for 3 hours and made 50 bucks lmao fuck that noise
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PSA: You're supposed to tip the Uber Driver. Especially when he puts up with your drunk ass at 3 AM and offers water.
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EvalAngell posted...

PSA: You're supposed to tip the Uber Driver. Especially when he puts up with your drunk ass at 3 AM and offers water.

I wasn't aware the culture had wormed it's way in. Back to driving myself around short distances, I guess.
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I don't trust reports like this because like how do they calculate the difference between regular maintenance costs for the persons car vs ones they are paying solely because of the extra miles do to working with Uber.
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that's the new gig economy

"After costs"

Sounds like BS
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CaptainCrunch posted...

EvalAngell posted...

PSA: You're supposed to tip the Uber Driver. Especially when he puts up with your drunk ass at 3 AM and offers water.

I wasn't aware the culture had wormed it's way in. Back to driving myself around short distances, I guess.

I know. When it came out at first, Uber's selling point was no tipping was expected, it's all included. Now, they have a tipping feature in the app.
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I mean

do we talk about other jobs that way? what does mcdonalds pay after transit costs?
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spanky1 posted...

CaptainCrunch posted...

EvalAngell posted...

PSA: You're supposed to tip the Uber Driver. Especially when he puts up with your drunk ass at 3 AM and offers water.

I wasn't aware the culture had wormed it's way in. Back to driving myself around short distances, I guess.

I know. When it came out at first, Uber's selling point was no tipping was expected, it's all included. Now, they have a tipping feature in the app.

yep. another way for corporate to trick consumers into paying its employees salaries for him. just like restaurants.

EvalAngell posted...

PSA: You're supposed to tip the Uber Driver. Especially when he puts up with your drunk ass at 3 AM and offers water.

I also was told never to accept the water for fear of date rape concerns, but i'm an unattractive dude so w/e
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Not to mention the time cost of commuting

With Uber and Lyft, there is really no extra commuting time. Your job is commuting.
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Damn_Underscore posted...

"After costs"

Sounds like BS

This.
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Balrog0 posted...

I mean

do we talk about other jobs that way? what does mcdonalds pay after transit costs?

True but TBF being an Uber driver is much closer to being a small business owner than being a straight up employee. Factoring in the costs to run the business kinda makes sense.
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Balrog0 posted...

I mean

do we talk about other jobs that way? what does mcdonalds pay after transit costs?

We typically don't talk about other jobs that way because of the hourly wage. If you're paid purely on a commission basis, then costs of doing the job are factored in a lot more even though there is technically a commute cost with an hourly wage job, too.
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Damn_Underscore posted...

"After costs"

Sounds like BS

the costs they talk about are:

1) gas (obvious)
2) wear and tear on your car
3) increased insurance costs
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CableZL posted...

We typically don't talk about other jobs that way because of the hourly wage. If you're paid purely on a commission basis, then costs of doing the job are factored in a lot more even though there is technically a commute cost with an hourly wage job, too.

I hear you

but there are also delivery jobs, and some of them are paid less than minimum wage by default and don't get paid any commission

I get that Uber/Lyft and their subcontracting form is special, I'm just saying idk how I feel about how we're conceptualizing costs here like it is so easily distinguishable
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Balrog0 posted...

but there are also delivery jobs, and some of them are paid less than minimum wage by default and don't get paid any commission

aren't those supplemented by tips? every pizza delivery driver i've known got a base wage (above min) + gas money + tips
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i've always tipped uber drivers, and always in cash, i don't know if that crappy company would be taking some of their tip otherwise
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Isn't it also true that Uber isn't even profitable? lol
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Reactionary Events: "this is a good thing"

Twin3Turbo posted...

True but TBF being an Uber driver is much closer to being a small business owner than being a straight up employee. Factoring in the costs to run the business kinda makes sense.

Sub-contracting culture is the worst thing to sweep the nation since Feudalism.

Hell, at least Feudalism had some good points.
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Not surprising. I usually ask my Uber drivers how long they've been doing it. 80% say a week or two/days.. which means high turnover
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andel posted...

GoodOlJr posted...

Ill never understand that business

Why did it randomly become okay to be an unlicensed taxi driver

they have to have a licence. taxi companies charge exhorbent rates and this is the market circumventing that but it is shady that these companies get away with paying their employees so little

No, he meant a license to drive a taxi. A thing taxi drivers are required to have but it's somehow OK for uber drivers not to
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Taxi drivers need the medallion because the city restricts the number of them in operation. Uber and Lyft don't have such restrictions, so driver pay is pretty much a race to the bottom, which is great for people using the services, but less so for the ones that need to eat.
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this is on average tho

you have to realize, the rideshare business is filled with people who have no idea what they're doing or even how much effort actually goes into this to make a decent profit

the people who do well can often do REALLY well

and there are guys who only ever uber/lyft on the weekends, pick up a cool $400 or so for like 15 hours of work
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determine the cost of insurance, maintenance, gas, and depreciation for various vehicle model

This is a complete nonsense way to estimate costs. The only direct variable cost here is gas. Any depreciation estimate is going to be horseshit and will completely overstate the costs.
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I save half my money taking uber rather than a taxi.

It was to good to be true of it remained this way.
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took an uber twice today and only spend little over 30 bucks
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Dumb article. Go on YouTube and search for uber or lyft paycheck and you'll see they make $2K every week. They make 6 figures a year so shut the fuck up.

Just another one of those things that was probably created as a way to make a little side money,people tried using it as a main source of income, and complain later when they can't.
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CaptainCrunch posted...

EvalAngell posted...

PSA: You're supposed to tip the Uber Driver. Especially when he puts up with your drunk ass at 3 AM and offers water.

I wasn't aware the culture had wormed it's way in. Back to driving myself around short distances, I guess.

Well I hope you get a DUI then
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andel posted...

that these companies get away with paying their employees so little

Technically you don't work for lyft, uber or whoever.

You work for yourself. All those companies do is give you a platform to get customers from.

You create your own schedule and work your desired hours. That's how uber and the like can not pay them a wage.
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i worked in rideshare for a while and learned a bit about it talking to other coordinators and drivers

seriously guys: they report THE AVERAGE is 4/hr, but even with all the bad stats and whatever, that's probably not far off

again, the business is FILLED with people who have absolutely no idea what they're doing, have no discrimination picking rides, pick bad times to go out for uber, don't stick to good locations, etc

They're not maximizing their profits because the whole thing is dependent on you figuring things out

Those people who supposedly make 6 figures a year doing uber/lyft have basically figured out all the right things to do. There are people who just wait by the airport or only accept rides to/from the airport because that's good money each time.

Too simple an explanation but gives a good outlook on the industry.

TL:DR people who are stupid and don't know how to maximize their profits fill TNC apps
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XxKrazyChaosxX posted...

Just another one of those things that was probably created as a way to make a little side money,people tried using it as a main source of income, and complain later when they can't.

Also this, I don't know if Uber ever meant for their thing to become a full time job. As I remember, it was advertised as a way to make money on the side.
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YOUHAVENOHOPE posted...

Also this, I don't know if Uber ever meant for their thing to become a full time job.

McDonalds and Burger King were never intended to become "full time jobs for grown ass adults" either, but look where we are now.
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@AvantgardeAClue

How much do you make an hour for Uber?

Also arent the increased drivers for Uber and Lyft weighing wages down? One guy could be doing it really good an hour but there could be seven other guys who earned crap or just quit,
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ProfessorKukui posted...

good.

YOUHAVENOHOPE posted...

XxKrazyChaosxX posted...

Just another one of those things that was probably created as a way to make a little side money,people tried using it as a main source of income, and complain later when they can't.

Also this, I don't know if Uber ever meant for their thing to become a full time job. As I remember, it was advertised as a way to make money on the side.

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