Economy

Uber/Lyft drivers earn median $3.37/hour after expenses

Uber/Lyft drivers earn median $3.37/hour after expenses”

$3.37 an hour-that's the median take-home pay if you drive for a ride-hailer, according to a new study. Knowing the type of auto allowed researchers to estimate the cost of things like fuel, maintenance, insurance, and depreciation by looking at data from Edmunds, Kelley Blue Book, and the Environmental Protection Agency. When accounting for detailed vehicle expenses and depreciation, 74 percent of drivers are earning less than minimum wage in their state and 30 percent of drivers are losing money. The results indicate that the "median profit from driving is $3.37 per hour before taxes, and 74% of drivers earn less than the minimum wage in their state". The average monthly profit for the drivers surveyed was $661 per month and the median was $310. The MIT study's authors said this deduction allows most ride-sharing drivers to "declare profits that are substantially lower", estimating that $4.8 billion in annual ride-sharing profit is untaxed.

In a statement to Fortune, Uber had a sharp rebuttal, saying that the research's "methodology and findings are deeply flawed". Drivers are allowed to use a standard mileage deduction-$0.54 per mile in 2016-for the purposes of tax, which exceeds the $0.30 per mile median costs.

Perhaps the company should address the findings of MIT's report before it "disrupts" the country's transit infrastructure for health care. "This business model is not now sustainable", Stephen Zoepf, the Stanford University researcher who led the study, told the Guardian.

The Uber spokesperson pointed out that this question could be interpreted as a request simply for "on-demand" income, not total income.

The study found that basically everyone driving for Uber or Lyft is using their vehicle for both business and personal use and that only 20 percent of them are doing the work full-time.

But he also noted the study points out that 80 percent of Uber drivers work fewer than 40 hours per week, implying that at least some of them derive income from other sources.

"It tells us that it's a shitty place to work", Tluszcz said. So the amount of drivers who count on Uber profit and tips as their main source of income for a prolonged period is likely very small.



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