vast majority of Uber and Lyft drivers are earning less than minimum
wage and almost a third of them are actually losing money by driving,
according to researchers at the Massachusetts Institute of Technology.
working paper by Stephen M. Zoepf, Stella Chen,
Paa Adu and Gonzalo Pozo at MIT's Center for Energy and Environmental
Policy Research says the median pretax profit earned from driving is
$3.37 per hour after taking expenses into account. Seventy-four percent
of drivers earn less than their state's minimum wage, the researchers
percent of drivers "are actually losing money once vehicle expenses are
included," the authors found.
conclusions are based on surveys of more than 1,100 drivers who told
researchers about their revenue, how many miles they drove and what type
of car they used. The study's authors then combined that with typical
costs associated with a certain car's insurance, maintenance, gas and
depreciation, which was gathered in data from Edmunds, Kelley Blue Book
and the Environmental Protection Agency.
earning the median amount of revenue are getting $0.59 per mile driven,
researchers say, but expenses work out to $0.30 per mile, meaning a
driver makes a median profit of $0.29 for each mile.
Uber spokesperson responded to the finding in a statement
to The Guardian:
newspaper also noted, "Other studies and surveys have
found higher hourly earnings for Uber drivers, in part because there are
numerous ways to report income and to calculate costs and time and miles
spent on the job."
authors also calculated that it's possible for billions of dollars in
driver profits to be untaxed because "nearly half of drivers can declare
a loss on their taxes." Drivers are able to use the IRS standard mileage
rate deduction to write off some of the costs of using a car for
business. In 2016, that number was $0.54
per mile. "Because of this deduction, most
ride-hailing drivers are able to declare profits that are substantially
lower," researchers write.
drivers are fully able to capitalize on these losses for tax purposes,
73.5% of an estimated U.S. market $4.8B in annual ride-hailing driver
profit is untaxed," they add.
to MIT researchers, 80 percent of drivers said they work less than 40
hours per week. An NPR/Marist poll in January found that 1 in 5 jobs in
the U.S. is held
by a contract worker; contractors often juggle
multiple part-time jobs.
and Lyft both have "notoriously
high" turnover rates among drivers. A report
last year said just 4
percent of Uber drivers work for the company for
at least a year.
Shahani reported in December that Lyft began a
program to give drivers "access to discounted GED and college courses
online" in a recruiting effort.
was only last year that Uber introduced the option to tip drivers into
its app for customers. Recode
listed the initiatives Uber rolled out in 2017
in order to appeal to drivers, including 24-hour phone support, paid
wait time and paying drivers if customers cancel after a certain amount
Uber and Lyft have been fighting legal battles for years against
initiatives to classify their drivers as "employees" instead of
"independent contractors" — meaning drivers don't receive benefits like
health care or sick leave.