Uber lures drivers with the idea of being your own boss and “making great money with your car.” The “great money” part is up for debate.
The median hourly pay with tip for Uber drivers in the U.S. is $14.73, according to a new study conducted by Ridester, a publication that focuses on the ride-hail industry. That figure includes tips but doesn’t account for expenses like insurance, gas and car depreciation incurred while working. Using Ridester’s low-end estimate of $5 per hour in vehicle costs, drivers would bring in $9.73 per hour and potentially much less.
That implies a driver working 40 hours per week would make an annual salary of almost $31,000 before vehicle expenses, and about $20,000 after expenses (but still before taxes). That’s below the poverty threshold for a family of three. It’s also a far cry from the $70,000 to $90,000 Uber once claimed its drivers made in major markets.
This is important because online “gig economy” jobs, including driving for Uber, are a growing part of the U.S. workforce: About 5 percent of the working population has worked in the gig economy in the past year, up from 2 percent in 2013. So their labor is increasingly tied to overall prosperity. Additionally, these workers are still typically considered contractors, meaning that they aren’t required to receive employer healthcare or other employee benefits.
Tech companies are also receiving increased scrutiny for how they pay their workers. Today, Amazon raised its minimum wage to $15 following criticism from politicians including Sen. Bernie Sanders.
The study, which was conducted this summer, asked drivers for a screenshot of their Uber app’s earnings page from their last full day driving. The 719 valid screenshots they used show how many hours the drivers worked and how much they were paid after Uber’s cut. It doesn’t factor in other costs like taxes or healthcare. And — worth noting — the study only represents drivers who were motivated enough to send in their data and isn’t necessarily representative of the geographical distribution of Uber drivers.
These numbers differ from Uber’s own study, which was conducted three years ago and also includes drivers who work for its more expensive services like UberBlack. That report estimated a 20-market average of $19.35 per hour before expenses — $5 more per hour than Ridester’s poll, which uses a nationwide median and only covers UberX drivers. In 2015, Uber estimated drivers’ average hourly vehicle expenses to be almost $3 for a driver who “uses a personal small sedan to occasionally drive on the platform,” to more than $6 per hour for someone who “uses a 4WD SUV to exclusively drive full-time on the platform.”
Another recent study by the Economic Policy Institute, which used Uber administrative data, found that Uber drivers made on average $16.44 per hour before vehicle expenses, which it said cost drivers $4.78 per hour, after taking into account their tax deductibility.
The median hourly pay for all taxi and ride-hailing workers in 2017 was $11.96, according to the U.S. Bureau of Labor Statistics.
In New York City, where Uber once claimed “the median wage for an UberX driver working at least 40 hours a week” was $90,766 a year, Ridester’s polling data shows that UberX drivers make $21.92 per hour, including tips but before expenses. Uber’s data from 2015, meanwhile, says drivers brought in $23.69 per hour there. And a study for the New York City Taxi and Limousine Commission released earlier this year found that last fall the median hourly pay from driving apps was $22.90 before tip. At $23 per hour, drivers would have to work 75 hours per week, every week, to generate $90,000.
The Ridester report comes on the heels of a bank-account study from JPMorgan Chase which found that, on average, ride-sharing drivers in the U.S. are making half what they did five years ago, thanks in part to an increase in the number of drivers driving fewer hours.
According to Uber, 80 percent of its partners “drive fewer than 35 hours a week across 20 of our largest markets, and more than half only drive between one and 15 hours each week.” Uber says that drivers’ hourly wages remain consistent over time.
The debate on car seats for taxis and ride-sharing services
Like many parents in New York, Caroline Hwang doesn’t use a car seat when traveling with her son in a taxi.
“It’s a calculated risk, because you’re not going very fast and the chances of you being in a serious high-speed collision are pretty low,” she said.
Research from Virginia Tech University finds New York is among 35 states where cabs are exempt from laws that require young children to travel in a car seat. Except for Georgia, it’s not clear if ride-sharing companies like Uber and Lyft are also exempt. In the other 15 states, children must have a car seat in all for-hire vehicles.
“There’s a lot of confusion that parents experience when they want to carry their children using rideshare services. The laws across the nation are inconsistent from state to state,” said Justin Owens with the Virginia Tech Transportation Institute.
Owens says in many states that require car seats, it’s not clear if the parent or driver needs to provide them.
“State legislatures really need to work on catching up the laws and regulations.”
In New York City, Uber will have a driver like Rafael Serrano provide a forward-facing car seat for an extra $10. Lyft has a similar program, but also, only in New York City.
“It’s super safe and reliable, so I’d rather have the kids safe than sorry you know,” Serrano said.
Uber and Lyft both tell us that drivers and riders in the rest of the country need to follow all local laws and drivers can turn down riders who do not provide a proper child safety seat.
Voting Today Can Get You A Bunch Of Free Stuff
Today is election day in the US and with comes not only an opportunity to exercise your civic responsibility, right and privilege, but also to get a bunch of free food and services. Although ideally people would vote even if they didn’t get a free side of fries in return, it’s good that people are going to get to the polls somehow.
Uber and Lyft are both offering discounts today, taking their political rivalry to the next level. Uber, you may remember, has been boycotted after showing inadvertent support for Trump.
The company declined to participate in a work stoppage that New York taxi drivers were engaged in to protest Trumps travel ban. Lyft became the service of choice for many people after the #deleteuber movement took hold. Now, both companies are offering deals on rides to the polls.
Uber’s is a discount only for first-time users if they put in a special election day code and Lyft is giving across the board 50% discounts for those going to vote.
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