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After expenses, study finds Uber, Lyft Drivers Earning A Median Profit Of $3.37 Per hour

Discussion in 'News' started by tcaud, Mar 1, 2018.

  1. tcaud


  2. Lunger


    "Trump is going (somewhere) next year"

    ....Says increasingly nervous guy for the 11th time.
    melusine3 likes this.
  3. My link clicking finger is broken. Got an article synopsis?
    Xeverrer and Ozzyoz like this.
  4. That seems just about right but the problem with those studies is that they took data from people without knowing the type of drivers they were, IMO the numbers are much lower when you drive blindly and do everything uber and lyft tell you to do or say... play by the rules.

    Drivers who abuse the system and know their spots make much more than 600 in profits, you can say 2 grand or so a month, still a pitance for all the juggling and risk it takes to pull it.
  5. tcaud


    "Average rideshare earnings among those surveyed = $3.30"
    Agent037, Blatherskite and MoreTips like this.

  6. Uber and Lyft drivers' median hourly wage is just $3.37, report finds

    Majority of drivers make less than minimum wage and many end up losing money, according to study published by MIT

    Sam Levin in San Francisco @SamTLevin

    Thu 1 Mar 2018 21.09 EST
    Last modified on Thu 1 Mar 2018 21.14 EST
    uber car

    Uber and Lyft drivers in the US make a median profit of $3.37 per hour before taxes, according to a new report that suggests a majority of ride-share workers make below minimum wage and that many actually lose money.

    Researchers did an analysis of vehicle cost data and a survey of over 1,100 drivers for the ride-hailing companies for the paper published by the Massachusetts Institute of Technology’s Center for Energy and Environmental Policy Research. The report – which factored in insurance, maintenance, repairs, fuel and other costs – found that 30% of drivers are losing money on the job and that 74% earn less than the minimum wage in their states.

    The findings have raised fresh concerns about labor standards in the booming sharing economy as companies like Uber and Lyft continue to face scrutiny over their treatment of drivers, who are classified as independent contractors and have few rights or protections.

    “This business model is not currently sustainable,” said Stephen Zoepf, executive director of the Center for Automotive Research at Stanford University and co-author of the paper. “The companies are losing money. The businesses are being subsidized by [venture capital] money … And the drivers are essentially subsidizing it by working for very low wages.”
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    Drivers earn a median of 59 cents per mile while incurring a median cost of 30 cents per mile, the report said, adding that for nearly a third of drivers, the costs are ultimately higher than the revenue. The paper reported the average driver profit to be $661 per month.

    While most drivers use vehicles for personal use and ride-hailing services, the bulk of the miles they drive are for work, which can lead to significant short-term and long-term costs, the paper said.

    Given inevitable costs of maintenance, repair and depreciation, “effectively what you’re doing as a driver is borrowing against the value of your car,” Zoepf said, adding: “It’s quite possible that drivers don’t realize quite how much they are spending.”

    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.

    Harry Campbell, founder of the Rideshare Guy, a website that has conducted surveys of drivers, said the finding of a $3.37 median hourly profit seemed a bit low, but noted that new drivers were often surprised by the wages.

    “The most common feedback we hear from drivers is they end up earning a lot less than they expected,” said Campbell, who partnered with Zoepf on the surveys used in the paper. “There is a lot of turnover in the industry, and that’s the number one reason I hear from drivers why they are quitting – they are not making enough.”

    Campbell pointed out that Uber itself had struggled to properly consider vehicle costs. Last year, the company shut down its US auto-leasing business after discovering it was losing 18 times more money per vehicle than it had previously understood. Some drivers claimed that the leasing program trapped them in debt.

    An Uber spokesperson broadly criticized the research in a statement: “While the paper is certainly attention grabbing, its methodology and findings are deeply flawed. We’ve reached out to the paper’s authors to share our concerns and suggest ways we might work together to refine their approach.”

    Lyft did not respond to a request for comment.
    Hannibalb and melusine3 like this.
  7. Sneered the Uber spokesperson: "It would be a pity if some of your surveys got broke."

    Harry had an Uber exec on his program this week and the only reason I listened all the way through was because the guest spoke with such disingenuous corporate optimism that he was interesting as a specimen of repulsiveness. His favorite word was "exciting ".

    As per usual, Harry lobbed him only anodyne softballs.
    Last edited: Mar 2, 2018
  8. HotUberMess


    “This report’s methodology is flawed”, claims corporate hack from company with 96% turnover rate
  9. RedANT


    SEA & MCO
    The flaw in this is assuming that everyone should be making the same amount of money. Income varies greatly depending on market, the hours you work, the area of town you work, your driving habits, etc., and just because some people suck at making money driving doesn't mean that we all do.

    This week I worked 17.5 hrs, I did 31 runs, drove 718 miles and I made $525 Uber + $54 Lyft + $37 cash tips. ($616, or $35.20 /hr gross) Gas cost me $46, assume I set aside $25 for oil changes and put $100 away for a ~$10k replacement vehicle every 2 years.

    $616 - 46 gas - 25 oil changes - 100 savings = $445 / 17.5 = $25.42 /hr NET.

    I know people will scream about depreciation, which is why I figured in $100 /wk for replacement or repairs. Likewise, people will say that I should figure in taxes, however even in private employment, taxes are NOT generally figured into stated salaries.

    Maybe I'm doing it wrong, or maybe others are. The difference is that I'm ok with the above. As a retiree, it sure beats sitting at home watching TV.
  10. jester121


    The report refers to driver earnings as "wages", and is therefore flawed on its face.

    Cynergie, Agent037 and Syn like this.
  11. anctedotal look the word up, this is an mit study some of the greates minds in the world exposing a very obvious ponzi scheme that 96% of people who ever drove find out within the first year

    every blank contract they send a driver should covers costs

    this mit study shows uber needs to almost triple rates just to make minimum wage & like real estate its location location location, i bought property based on the most profitable efficient ride so 100% of my requests im in the bed or couch, no idling no burning gas circling staying warm or cool, i watch the cockroaches circle me all day & pass them the scraps that will lead to their failure, it shouldnt be that way
    melusine3, Mista T and HotUberMess like this.
  12. BurgerTiime



    A study from MIT says most drivers are making less than minimum wage.

    The 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.

    A 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 say.

    Thirty percent of drivers “are actually losing money once vehicle expenses are included,” the authors found.

    The 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, Kelly Blue Book and the Environmental Protection Agency.

    Drivers 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.

    An Uber spokesperson responded to the finding in a statement to The Guardian:

    “While the paper is certainly attention grabbing, its methodology and findings are deeply flawed. We’ve reached out to the paper’s authors to share our concerns and suggest ways we might work together to refine their approach.”

    The 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.”

    MIT 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.

    “If 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.

    The MIT researchers said 80 percent of drivers said they work less than 40 hours per week. An NPR/Marist poll in January found 1 in 5 jobs in the U.S. is held by a contract worker; contractors often juggle multiple part-time jobs.

    What's worse, approximately 75% of drivers earn less than the minimum wage in their state.

    Uber 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.

    NPR’s Aarti Shahani reported in December that Lyft began a program to give drivers “access to discounted GED and college courses online” in a recruiting effort.

    It 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 of time.

    'This business model is not currently sustainable,' Stephen Zoepf, a co-author of the paper, told the Guardian.

    'The companies are losing money and the businesses are being subsidized by [venture capital] money'

    'Drivers are essentially subsidizing it by working for very low wages,' he added.

    Both 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.

    Uber CEO slams MIT after study on ride-hailing minimum wages
    Last edited: Mar 3, 2018
    Mohfaith, Agent037, melusine3 and 4 others like this.
  13. Mars Troll Number 4

    Mars Troll Number 4

    So uber is claiming that these MIT researchers are using flawed methodology?

    When the researchers info reflects... what we all have been saying for a long time?

    Who could have seen that one coming?
  14. Mars Troll Number 4

    Mars Troll Number 4

    You're doing it right.

    *Seattle* cough cough cough..

    My thinking... Seattle falls into the 26% that makes above min wage. Something you keep failing to mention is how much higher Seattle rates are than most other markets. VS Orlando falls in the 30% that loses money.

    So 31 runs get's you $616..

    At Orlando rates that's probably closer to $200 with close to the same miles driven. 718 miles. At 30c a mile in costs.. that's... $215 in costs... or

    Losing money.

    It's not about sucking at your job, it's about living in the right market.

    I get about 4 times the uberX rate per mile running a taxi. It's also easier to stay busy driving a taxi here than it is on lyft, while about the same on uber.

    If a short trip pays you $3.00 and a half hour long drive pays you $20... you're never going to see anything but crap numbers.

    Knowing what I know...

    I could have predicted MITs numbers.

    1/4 nation wide are doing better than min wage in profit.
    1/4 are losing money.
    3/4 are making less than min wage
    melusine3, Nats121 and Mista T like this.
  15. SEAL Team 5

    SEAL Team 5

    That's the ole pessimistic view of the glass is half empty. An optimist would say "Hey, twenty-six percent of drivers earn their state's minimum wage."
  16. littlegoodwolf


    saint louis
    i think circumstances have to be examined as well. Right now I am cash poor but the equity in my car is high. I am using that equity to squeeze out the cash that I need right now and doing so at my own hours etc... The fact that I can do it tax free bc the mileage deduction outweighs the income is an added bonus. its just what works for me at this moment and lets me pursue a cash-poor life option for a while.
    Eugene73 and Rakos like this.
  17. I think drivers should print off copies of the MIT report and have them available for passengers to read and reflect on. Uber and Lyft will do nothing to explain to passengers about how drivers are not making an acceptable living to provide this service. MIT is a globally respected research university. Our driver group is going to try handing out this report to every passenger for a few weeks as an experiment to see if it has any impact on tipping and driver ratings.
    mrpjfresh, Booberx, melusine3 and 6 others like this.
  18. getawaycar


    the beach
    It's sad when workers at Walmart and McDonalds are making more than you.
    Nats121, melusine3, grams777 and 3 others like this.

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