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.
Half of U.S. Uber drivers make less than $10 an hour after vehicle expenses, according to a new study
They would make more at an Amazon warehouse.
Roberto Machado Noa / Getty
Rani Molla was a senior correspondent at Vox and has been focusing her reporting on the future of work. She has covered business and technology for more than a decade — often in charts — including at Bloomberg and the Wall Street Journal.
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.
This article originally appeared on Recode.net.
