Finally someone documents the truth - Uber and Lyft drivers make less than $4 per hour and MIT study shows many are actually LOSING money by working as a driver - ceepr.mit.edu
Uber and Lyft are among the top 10 highest-valued startups in the U.S., with the firms being worth $68 billion and $11.5 billion respectively.
While the ride-hailing giants are raking in the cash, it seems that not everybody who works at the companies is so lucky. But many drivers are paid wages that are below minimum wage in many states. The move comes as Uber tries to repair its relationship with its network of drivers.
Will self-driving cars ever be able to compete with lyft and uber drivers willing to lose money each day for the privilege of driving passengers ?
What's worse, approximately 75% of drivers earn less than the minimum wage in their state.
The researchers surveyed more than 1,100 Uber and Lyft drivers for the study and compared that data with costs like insurance, maintenance, repairs, fuel and depreciation.
Lyft and Uber treat their drivers as 'independent contractors,' which means they can't take advantage of typical employment benefits, such as health insurance, overtime pay, workers' compensation or unemployment, among other things.
MIT researchers noted that part of the job means that drivers have to deal with unpredictable customer demand, as well as the cost of maintaining a vehicle.
So it likely came as no surprise, then, when they discovered that 30% of drivers 'are actually losing money once vehicle expenses are included.'
They found that the median driver generates 59 cents per mile of driving but incurs costs of 30 cents per mile.
Researchers surveyed over 1,100 Uber and Lyft drivers for the study and found that, on average, they make about $661 of profit per month, which tends to be below minimum wage
'Results indicate that profit from ride-hail driving are very low,' the study notes. Average drivers earn about $661 of profit per month, according to the study.
The study does little to quiet rising concerns about labor standards in the fast-growing gig economy.
'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.
Other studies have shown that Uber drivers make higher wages because there are many ways to calculate wages and expenses. |
