
Uber, Lyft Drivers Earning a Median Profit of $3.37 per Hour, Study Says - javabank
https://www.npr.org/sections/thetwo-way/2018/03/02/590168381/uber-lyft-drivers-earning-a-median-profit-of-3-37-per-hour-study-says
======
thisisit
Discussed 12hrs ago:

[https://news.ycombinator.com/item?id=16498551](https://news.ycombinator.com/item?id=16498551)

------
misterbishop
Discussing a rideshare worker's take-home pay as "profit" really accepts the
framing of the company. Yes it's technically true that each driver is an
independent contractor ("Small Business Owner"), but this designation is a
farce without the ability to set pricing. The take-home pay isn't profit in
practice, it's wages less unreimbursed expenses.

~~~
regulation_d
Let’s say I’m a dry wall contractor. A general contractor comes along and
offers me $20k for a job. I say “$25k?” and he says, “No, $20k.”

If I take the job I am not magically transformed into an employee of his,
simply because I lacked the bargaining power to negotiate the rate.

The reason I am still a contractor is that I have absolute control over
whether to agree to do that job at that price.

There are obviously lots of factors that are considered in the
employee/contractor analysis. I just don’t feel that “ability to negotiate
rate” is a particularly important one when “absolute ability to refuse fare”
is in the picture.

~~~
pfortuny
MMmmmh, but you do not lose your job as a dry wall contractor. You lose your
“uber driver” job if you do not accept uber’s fares.

What am I missing?

~~~
Someone
“Uber Driver” isn’t a job (in the USA; some other countries disagree); you’re
a contractor, and you’re free to find customers via other means (e.g. via
Lyft, paying their margins, via word-of-mouth, via your own web site, etc.)

Yes, that may be hard or effectively impossible, but a bad dry wall contractor
will not be able to hold his business afloat, either.

~~~
trsse
> you’re free to find customers via other means

Except you aren't. In many cities it is illegal to just start taking
passengers for fees.

~~~
Someone
Either Uber runs a legal business, in which case I would expect others can
start similar businesses, or they don’t, in which case this is like
complaining that you can’t start a local mob legally after the one you worked
for kicked you out.

Yes, that may be difficult, but Uber has shown it to be possible; ‘just’ find
some investor with a few billion to spare, and you can do it, too.

Returning to the original argument: even if Uber drivers were employees, the
argument “Uber can’t kick me out because I can’t get a job as an Uber driver
elsewhere” doesn’t hold water, and replacing “Uber driver” by “driver” doesn’t
change that.

------
eddieplan9
It's important to not use the IRS Mileage Rate to calculate real cost. (The
linked study does not.) The IRS rate is designed for the worst case scenario
for the purpose of tax filing (coz you don't want to penalize someone who has
to drive a F-150 in a high-gas-price state in a year where gas price spikes to
$5/gallon). Even if we don't consider the fact that the cost of vehicle
depreciation, maintenance and insurance is an "almost-fixed" or marginal cost
because you are going to own the vehicle and pay for the insurance any way,
and let's be generous about estimating the cost here:

At IRS rate of $0.54 a mile, let's say we buy a Prius (which is the most
popular car used for ridesharing), for $23,000, and drive it for 100,000 miles
and throw it away.

At IRS rate, that's a cost of $54,000.

Gas cost is about $8,000 (50MPG [1], $4/gallon). Insurance $1500 x 5 years
($1200 base insurance + $300 extra for rideshare add-on [2]). That still
leaves us $15,500 (28.7% of estimated cost) to cover repair deductible etc.
That's almost enough to buy another Prius.

Edits: I mistakenly said the study used IRS Mileage Rate. It does not.

[1] [http://mikes-review.com/does-a-toyota-prius-really-
get-50-mi...](http://mikes-review.com/does-a-toyota-prius-really-get-50-miles-
per-gallon.htm)

[2] [https://www.nerdwallet.com/blog/insurance/best-
ridesharing-i...](https://www.nerdwallet.com/blog/insurance/best-ridesharing-
insurance/)

~~~
ghaff
The paper actually uses a $0.30/mile figure. "A Median driver generates $0.59
per mile of driving, and incurs costs of $0.30 per mile."

The paper actually seems to be trying to make the point that Uber drivers are
gaming the tax system because their actual costs are lower than the IRS
allowance.

$0.30 seems like a fairly reasonable number and it also matches up well with
renting a car that's intended to be driven for a week like this and just
buying gas for it. (There's also some cost associated with deadheading to the
next pickup.)

The $0.59/mile revenue does seem a bit low. UberX or Lyft would seem to
typically have pricing in the neighborhood of $1.00 to $1.50 per mile of which
about 75% goes to the driver. So $1/mile would seem likely to be a better
revenue number in which case the net is more like $0.70/mile and I would have
to believe most drivers, even in a larger city, are driving 10 miles or more
in a typical hour.

I doubt driving for these services is a huge win once all costs are taken into
account but it seems closer to being a minimum wage job than a total bust.

~~~
eddieplan9
Thanks for pointing out my mistake. You are right. I edited my comment.

To be fair, if the point is to compare profit, then we also need to consider
that a traditional worker making minimum wage also needs to commute to work.
The average commute of a worker is 30 miles round trip [1]. The cost of that
will eat into their earning as well and cannot be deducted from their taxes.

[1]
[https://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/files/pu...](https://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/files/publications/omnistats/volume_03_issue_04/pdf/entire.pdf)

~~~
ghaff
It's sort of a weird point which, if it belongs anywhere at all, probably
belongs in a different paper. It's a reasonable question to ask whether IRS
guidelines that were mostly designed in the context of standard business
deductions are really appropriate for driving services where most drivers are
buying cars that are optimized for the role.

But it's also pretty much a totally orthogonal point to one about how little
Uber drivers make.

------
derekp7
The problem isn't the profit, but that there are a number of people using this
as one of their primary income sources. I'm not sure how Uber et. al was
originally promoted to drivers, but I've originally seen it as something like
"I'm heading home from work, let me turn on my uber app and see if anyone
around me needs a ride going in that direction".

Or, "I feel like riding around tonight, no particular place to go, may as well
see if I can make a couple bucks by giving others a lift". I know that back
when I was around 18 - 22 or so, I would often spend a saturday night just
cruising with the radio playing, windows down, and enjoying the ride.

~~~
kbenson
> see if anyone around me needs a ride going in that direction

Do they allow you to set a destination area so that your fares are limited to
this, or do you just get to review and accept fares so you can choose ones in
the right direction? I wasn't aware it could be used to just pick up someone
going the same direction.

I can see something like that doing very well, but I can also see how Uber
might want to brand it slightly differently, as those drivers may be slightly
less invested in driving for Uber and might be more likely to flake or not be
as accommodating to passengers.

~~~
ErikVandeWater
Drivers have the ability to set an end-destination so their last ride is near
there ultimate destination.

Source: I asked an Uber driver about this a few months ago.

~~~
s73v3r_
That is very recent, however. In the beginning, there was no such thing.

------
csomar
Two things:

1\. The cost is absorbed by another entity, usually the parents. It is the
parents' car, or your parents bought you a car. You need some quick cash, so
you basically "eat out" of that car to generate that "cash".

2\. You are trapped in a situation where you need quick cash. So you "eat out"
of your vehicle to generate that cash. This also happens when you have a low
"realization" consciousness. (ie: You are bad at math and economics and you
think you are making money while you are losing money).

By driving Uber you are exposing yourself to greater risks: Accidents,
Lawsuits and Lost opportunities have you been doing something else. But most
people either have low realizations or are trapped. Usually both of them.

I have seen countless of people getting into this kind of business. One of
them and probably the biggest is real-estate renting when the economics says
NO! The argument is usually: well, it is sitting there anyway so any cash is a
profit. It is not and it usually led to worse financial situations and then
worse decisions.

~~~
kirkland
Is "eat out" a real term, or just something you made up? The term I've heard
for this sort of thing would be "capital consumption".

~~~
csomar
I just made it up as it is easier to understand than capital consumption.

------
rodonn
This paper has actual data on earnings from all Uber drivers in all cities in
the US. They find that the average earnings are $20 per hour with a standard
deviation of $5 (there is substantial variation across cities and especially
across time, with late nights on weekends being especially high earning).
[http://www.nber.org/papers/w23296](http://www.nber.org/papers/w23296) The
authors are very well respected economists from UCLA and Yale, though it
should be noted that one author was a former Uber employee.

This is substantially higher than the estimates in this newer study unless you
think that the per hour operating costs of a car are $16 per hour. The new
study bases it's numbers on self reported values from a relatively small
sample, which is much less accurate than calculating an average using Uber's
actual full database.

Another interesting finding from the study I linked is that a majority of Uber
drivers work 20 or fewer hours per week and place a substantial value on the
flexibility that they get from being able to choose their own hours.

~~~
haldean
I can't read the paper you link but in the abstract-ish thing you've given
here, $20 is a mean. The MIT paper says $3.37 is a median. Both could
simultaneously be true!

~~~
rodonn
Sorry about the paywalled link. Here is one that should be freely accessible.
[http://www.anderson.ucla.edu/faculty_pages/keith.chen/papers...](http://www.anderson.ucla.edu/faculty_pages/keith.chen/papers/Final_NBER17.pdf)

I agree that the mean and median could in principal be this far apart, but it
would require a lot of skew in the data (small number of very high value trips
-- seems possible).

------
Liquix
What is the incentive to drive for one of these services at that price point?
Couldn't these people make more money (and not have to replace their car in
five years) flipping burgers or the like?

Are drivers misled into believing they will make more? Is the cost per mile
intentionally hidden from them?

~~~
calvinbhai
Subprime leasing programs.

Initially the lease looks very attractive, because you get a swanky new car,
combined with bonuses and stuff that you get as a new driver.

Few months in, the incentive turns into a shackle. You start realizing that
incentives are dwindling and the monthly payments are eating into most of your
Uber earnings, which was masked by higher new driver incentives initially.

At this point, loss aversion kicks in, and forces the driver to drive crazy
number of hours every day, just to make a decent profit over operating costs
and the monthly due for the car.

With more such drivers in the market, and an ever dipping price for rides,
$/Mile reduces.

That's the incentive.

update: If you think Uber/Lyft in the US is bad, talk to Uber/Ola drivers in
India. Many of them are sleep deprived and driving, to make ends meet. And
often barely earn enough to justify the costs.

~~~
CodeWriter23
If you’re going to do this, I recommend renting weekly through the Lyft/Hertz
or Uber/Enterprise route. It costs more per week, but both networks have a
quota where free rent kicks in. But you’ll have to drive superhuman hours and
only for the one network to hit the quota.

~~~
s73v3r_
Its for that reason that, unless you really, really need a car, I would
suggest not doing that. If you want to have any kind of a life outside of
driving, then you're likely not going to make the high quotas.

------
bparsons
The flaw in these studies are the assumption that the person would not have a
car unless they were an Uber/Lyft driver. This has a huge impact on the final
per hour calculations.

If the vehicle is a fixed cost for the person regardless of whether or not
they are a driver, then factoring in the cost and depreciation of the vehicle
isn't really a fair measure.

~~~
jakewins
> If the vehicle is a fixed cost for the person regardless of whether or not
> they are a driver

What? Vehicles are clearly not fixed cost, they are assets that deprecate in
value from use. There is _some_ deprecation from age, but by far the
determinant of value is miles driven and damage from use.

Every mile you drive for Uber is costing you money in lower resale value of
your vehicle, both from the miles you add to it and from the probability of
damaging the vehicle in an accident.

------
martin_bech
3 problems.

1\. This is at subsidised Uber pricing, where Uber is loosing money at an
alarming rate.

2\. This means driving for Uber is terrible economicly.

3\. This also implies that even getting to driverless cars, Uber will only
save 3.37 per hour, not making the business model viable, I would think.

~~~
bitcurious
3\. This also implies that even getting to driverless cars, Uber will only
save 3.37 per hour, not making the business model viable, I would think.

Should be higher. Insurance, energy and maintenance will be cheaper at the
scale of Uber's fleet. Driving style might be optimized for MPG. Cars will be
available 24/7 with no downtime.

~~~
dsfyu404ed
They'll save more than that.

They'll be registering/insuring the vehicles in a state where it's cheap to do
so.

Uber's geographic distribution results in the average uber driving paying
significantly more baseline cost just to legally field the vehicle. Being able
to choose your jurisdiction is probably a ~$1k per year savings over the
current Uber driver average.

TBH one of the things I'm looking forward to about self driving cars is that
states will be forced to actually compete with each other on
registration/insurance/tax.

>Driving style might be optimized for MPG

If (NumSecondsLightHasBeenRed()) > 3 && NobodyInFrontOfMe){keepgoing()}

Not quite what you had in mind, was it? Remember, this is Uber, we're talking
about.

~~~
s73v3r_
Every state in the union requires you to register your vehicles in the state
they're in. You're not going to be able to register the cars in Deleware or
South Dakota and have them driving in California.

~~~
dsfyu404ed
Yes you can. What I described is incredibly common in the rental vehicle
business.

~~~
s73v3r_
For vehicles that routinely travel across state lines. Driverless Uber isn't
going to be doing that.

------
jdlyga
Uber, Lyft, and Juno only exist because the Taxi apps are bad or non-existent.
If there was a Taxi app that worked exactly like these 3 apps, and not just
for hailing taxis, then there would be no need for this.

~~~
ghshephard
That is entirely dependent on _where_ you live and the quality of the Taxis.
For example, in the London and Singapore, Taxis are awesome. In California,
(particularly in the Bay area) - Taxis are horrible beyond belief. The cars
are unsafe and uncomfortable, the drivers are terrible and lack knowledge.
It's often the case that I will come out of a peninsula hotel (Say, San Mateo)
and see a queue of taxis waiting to pick up passengers, and at the same time,
a queue of people (myself included) waiting 5-10 minutes for an Uber to
arrive. And that's just Uber X. Can you imagine executives used to Uber Black
ever getting in a Taxi again?

I've taken thousands of taxi rides and over a thousand uber rides. No
comparison between the two in certain regions.

~~~
metalliqaz
In front of that hotel in San Mateo, are the Uber customers chasing a better
experience, or a better deal?

~~~
ghshephard
They are almost all business travelers, so multiple possibilities - A big one
is Uber travel is trivial to expense, a lot of companies just send it directly
into the expense system, and you don't even need to do anything. Another one
is (for some reason) a lot of business travelers shy away from Uber X and only
ride Uber Black - I have _no_ idea why, after a thousand+ rides in UberX, I
really don't see the additional value of Uber Black, unless maybe you are
giving a customer a ride? Price is, within reason, irrelevant to business
travels - company is paying for it anyways. Speaking for myself, personally -
I will do almost anything to avoid having to get into a Cab in San Francisco
or the Peninsula, from a experience/comfort perspective.

------
tibbon
In speaking with various drivers I've had I either hear that driving for
[Lyft|Uber] is great, or terrible. There's rarely any in between.

I've had drivers who had worked with them for years, and seemed to be really
happy, also new ones who were happy. Perhaps they have lower living expenses,
or this is more pay than they made at other ventures, or uniquely fits their
lives.

And I've had others who are really frustrated with the app, the GPS, traffic,
the company, their compensation, the Pooling services, riders, etc.

Of note these are generally in the same geographic areas roughly (Boston and
SF is where I ride most and flip between services as needed), so in theory
it's sampling from a similar population.

One thing in particular I've asked drivers is if pool-services work ok for
them. About half say yes and seem to love it, and the other half grumble that
it never makes them any money.

I really wish I knew the other factors that go into this to understand the
root causes better.

~~~
chadwittman
I've ran into very similar feedback and I survey just about every Uber/Lyft I
ride in.

------
zemvpferreira
I wonder how much airbnb hosts are making. In Lisbon most airbnb hosts are
amateurs who spend a few hours every week cleaning and greeting, and get the
bejeezus taxed out of their parallel activity. I wonder if they’re doing any
better than “transportation entrepreneurs” working for ridesharing companies.

~~~
bsenftner
In Los Angeles, my sister was AirBnB'ing a very nice 2 bdrm condo in an
architecturally famous French Castle moved from France to the Hollywood Hills.
The condo itself is the former home of a young Frank Sinatra, and the Castle
currently has Slash from G&R using a unit as a local get-away. You'd think a
place such as this could get a decent rate, right? It goes for under $100 a
night right now. The market is so saturated, there is no market.

------
vlovich123
I analyzed the math here:
[https://news.ycombinator.com/item?id=16503218](https://news.ycombinator.com/item?id=16503218)

TLDR: It's probably correct but also highly misleading in how it's
characterized.

------
filesystem
“Of the five sources of cost estimated per mile (Insurance, Maintenance,
Repairs, Fuel and Depreciation), approximately 40% of costs are attributable
to Insurance, Maintenance and Repairs, 40% to fuel expenses, and 20% to
depreciation.”

I don’t understand how insurance is a relevant cost. Insurance is required to
legally operate a vehicle - this is something that they must have for their
personal vehicle regardless of whether or not they are driving for Uber or
Lyft. The only way this is a relevant cost is if they own their vehicle for
the sole purpose of Uber or Lyft driving. I have to imagine that this is
usually not the case.

~~~
mywittyname
Insurance for driving an Uber/Lyft is much more expensive than regular
insurance, because it's considered commercial. In previous years, people could
get away with not having it, but today every insurance company asks
specifically if this vehicle was _ever_ used in a driving service and will
deny claims if it was found to be.

~~~
FLUX-YOU
>but today every insurance company asks specifically if this vehicle was ever
used in a driving service and will deny claims if it was found to be.

This seems crazy or wrong.

If I buy a vehicle used as an Uber/Lyft vehicle and that's on record
somewhere, but I've never been an Uber/Lyft driver, I will get my claims
denied?

~~~
joncrocks
I think it's maybe worded a bit confusingly.

It's more likely that if you are trying to claim on your insurance, they will
ask you "have you driven for a ride-share service at any point since the start
of your policy" and deny your claim if you have. And presumably it's fraud if
you lie on the claim.

~~~
mywittyname
Yes, this. I was involved in an accident a few months back and adjuster for
both companies asked if I ever used this car to drive for a ride sharing
service. I don't recall it being limited to the duration of the policy though.

------
sol_remmy
This is a duplicate. Previously:
[https://news.ycombinator.com/item?id=16498551](https://news.ycombinator.com/item?id=16498551)

------
eqdw
Ways in which this headline is potentially misleading:

1) Driving for Uber/Lyft/etc is not a full time job, and was not intended to
be a full time job. It's a piecemeal work side job. The flexibility of working
when you want, and not working when you don't want, is valuable and you don't
get it for free.

2) "Profit" is not income. This is profit net of expenses. Expenses that,
among other things, you can write off against your income. And to pre-empt the
"Uber drivers can't afford tax accountants" criticism, Turbotax costs $50

3) The profitability of Uber driving can vary dramatically place to place. I
often ask Uber drivers in SF how they like their jobs, what they make, etc.
They consistently report to me that they make between $40k and $55k/yr. This
is significantly higher than "below minimum wage". OTOH, I imagine that
driving Ubers in a low density place, where cabs are less financially viable
(say, Fargo) is a shitty job. Averaging across the San Franciscos and the
Fargos of the country to say "Uber is a terrible job" is not an accurate
representation of the facts.

~~~
tom_mellior
> Driving for Uber/Lyft/etc is not a full time job [...] They consistently
> report to me that they make between $40k and $55k/yr.

Is this 55k from part-time Ubering, or is this 55k in total, most of which
comes from their "real" full-time job and a small fraction from Ubering, or is
it 55k from full-time Ubering in direct contradiction of what you said, or
what?

~~~
AlphaSite
I was talking to a guy and he said he gets around 30usd/h from full item
Ubering.

~~~
tom_mellior
Assuming this is comparable to the above figures of 40k to 55k per year, and
assuming 50 weeks worked per year, that comes out to 27 to 37 hours driving
per week. Maybe not full time, but hard to argue that it's just a small side
thing.

------
qudat
And yet people still do it. I guess the drivers still find it useful, if they
didn't, why would they continue driving?

~~~
s73v3r_
Because they have literally no other choice? When your choice is to lose money
driving for Uber, or starve, you kinda lose the ability to stop if you don't
find it "useful".

~~~
liamhawkins
I'm not defending Uber/Lift here, I completely agree that there is a mismatch
between the perception of being an Uber driver and reality, but I don't fully
understand this argument. If they have "literally no other choice" were they
starving before Uber/Lift existed? These companies haven't existed that long,
and the majority of Uber/Lift drivers are not former/current taxi driver that
now need to use these apps because the market has shifted. These are people
who <5-10 years ago would not have been Uber or Taxi drivers. For these people
this market opened up where it had not existed before, an income source that
did not exist.

Is it better for a space like this to not exist if it can't supply the
7/10/15$/hour that would be deemed acceptable? I genuinely don't know.

~~~
s73v3r_
You've not made a convincing argument for why this kind of fraud should exist.

~~~
liamhawkins
With respect to your original comment about drivers being forced to drive or
else they will starve, where is the fraud?

If I put up a sign that says "Sit on my lawn and get 3$/hour", and people see
that sign and choose to sit on my lawn, am I committing fraud for not paying
them more? I still don't understand the argument.

------
graeme
In my city (Montreal) there are some Uber drivers who seem very content and
have driven for 3+ years.

They often have very nice cars. What is going on: are these drivers just doing
it as a hobby? Are they somehow earning more than others?

One would assume that you can be fooled and stay in the game for 3-9 months at
$3.37 an hour, but not 3+ years.

~~~
CodeWriter23
Some will earn more than the median, some less. At the Uber Black level, it is
possible to earn a decent wage in a densely populated urban center.

~~~
graeme
Ah makes sense. They could have been Uber Black drivers who decided to take a
regular Uber fare. That happens sometimes when there are no Uber Black
requests active.

I think I'll start asking those with dingy cars how long they've been driving.
And I'll ask those with nice cars if they are also Uber Black drivers.

------
phkahler
At $0.59 per mile these guys are stiffed really really hard. The IRS
recommendation is over $0.50 per mile:

[https://www.irs.gov/newsroom/standard-mileage-rates-
for-2018...](https://www.irs.gov/newsroom/standard-mileage-rates-for-2018-up-
from-rates-for-2017)

Perhaps these companies should charge at least that rate, not to mention the
drivers should be setting their own rates on top of that.

With an average speed of about 20mph (EPA urban drive cycle) you would need to
"profit" about $0.50 per mile to make $10 per hour. I'm not gonna look up
minimum wage and it varies per state, but anyone charging less than $1 per
mile to give you a ride would seem to be screwing themselves over and would be
better off flipping burgers.

------
cypherg
Questionable statistics. I know several people who driver rideshares for a
secondary income and do quite well. They're not irrationally wasting their
time. They're using vehicles that they're _already_ paying insurance on, et
cetera. From their POV, they either drive rideshares and make money (couple
hundred bucks maybe), or stay at home and relax. They've explained to me that
they do it because their bored or have free time.

~~~
andymal
Most personal insurance doesn't cover driving for Uber or Lyft. Your friends
may want to double check that they're actually covered.

------
dpflan
To support any discussion on this post, here is an earlier HN post of the same
content but from a different source:

>
> [https://news.ycombinator.com/item?id=16498551](https://news.ycombinator.com/item?id=16498551)

> The MIT CEEPR Research:
> [http://ceepr.mit.edu/files/papers/2018-005-Brief.pdf](http://ceepr.mit.edu/files/papers/2018-005-Brief.pdf)

------
ec109685
The maintenance, insurance and depreciation cost of driving Uber an unlimited
miles a week is $214 a week, minus a profit margin for a company like Hertz:
[https://www.hertz.com/rentacar/misc/index.jsp?targetPage=Ube...](https://www.hertz.com/rentacar/misc/index.jsp?targetPage=UberFAQs.jsp)

So any study that says it is more expensive than that to drive for Uber is
wrong.

~~~
ghaff
That doesn't seem inconsistent with a 30 cents per mile figure. If someone
drives 1,000 miles over the course of a week (which is the minimum rental),
that's about 20 cents a mile for the car and about 10 cents a mile for gas.
You can quibble with the details but would seem to be in the right ballpark.

------
_zachs
Good thing no one is being forced to drive for Uber. If your main source of
income is from being a ride-share driver, the problem isn't with Uber.

~~~
s73v3r_
That's not a valid argument. Technically no one is forced into prostitution
either.

~~~
danans
That's a bad example to use. A lot of people have been forced into
prostitution, especially trafficked minors.

------
nocobot
I'd be interested to see what the median profit would look like after
adjusting for COL. My guess would be that most high earning drivers are in
areas with high population density (thus also likely to be more expensive) so
I'm not sure if the increased hourly rate necessarily implies that they are
doing better.

------
xivzgrev
I think the methodology is flawed to mix data sources like this. They shouldve
surveyed drivers on their costs too.

------
davemel37
Ironically, Lyft is advertising to recruit drivers on this very article!
Sometimes ad targeting misses the boat.

~~~
_emacsomancer_
Maybe. But there are probably enough people for whom $3.37/hour profit sounds
better than $0/hour.

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AlphaSite
Does this include the bonus incentives? From my conversations that’s where the
money actually is.

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yomly
Anecdata: I talked with an Uber driver the other day in London who said his
weekly target was to make £1000 gross per week and would adjust hours (ie less
or more) accordingly. On the side he was trying to bootstrap a business.

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mseebach
I'm curious as to how they measure hours worked, to come up with the per-hour
figure. The brief of the study doesn't mention it at all.

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gyrgtyn
We should make a web spreadsheet Uber Profits Calculator and a nice little
print flyer to quietly leave behind in the back seat.

~~~
metalliqaz
send me a link when you're finished

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cryoshon
it's almost like i detailed this phenomenon two years ago.

[https://cryoshon.co/2016/01/11/why-the-sharing-economy-is-
aw...](https://cryoshon.co/2016/01/11/why-the-sharing-economy-is-awful/)

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toblender
Vs. 0 dollars if these services did not exist.

~~~
Liquix
Are you implying that if they were not earning $3/hr, they would use those
hours to sit around and mope? The point is that $3/hr is a very small reward
for your time when compared to pretty much any other use of that hour(i.e.
flipping burgers, bagging groceries, making coffee is 3x as lucrative)

~~~
aianus
Yes. I drove part-time for Uber and the vast majority of Uber drivers are
part-time. I had a real job paying 7x more during the day. If Uber didn't
exist I just would have earned less.

I assure you I wasn't earning $3/h though, that was just what it ended up
saying on my taxes because they let me deduct part of my fixed expenses that I
was paying anyways like insurance, finance interest, license, registration,
etc. It was closer to minimum wage, and tax-free at that (which suited me
because my marginal tax rate was high from my day job).

Before Uber I just drove for free by myself in random directions for fun. That
was way more expensive.

Edit: I also have an expensive car that guzzles premium fuel, or it would have
been significantly more than minimum wage.

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jdpigeon
'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.'

So they might be making money, but only by avoiding taxes. Great. /s

~~~
greenshackle3
Deducting business expenses from revenue is not 'avoiding taxes', it's what
all businesses do. Businesses are taxed on net profit, not on revenue. This is
a feature, not a bug.

They sound confused about profit vs revenue, that $4.8B figure is not really
'profit' if it doesn't account for operating costs and depreciation of the
car.

Very few businesses would be profitable if they were taxed on revenue rather
than net profit.

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saas_co_de
It does seem that there are glaring flaws in the methodology:

1) They use average numbers for vehicle expenses which are going to be much
higher than what professional drivers with strong profit incentives are going
to pay

2) They report on a sampled average of all Uber drivers while acknowledging
that the vast majority of these are part time and temporary employees who are
not really optimizing their profits. If they looked only that those who do
Uber full time or for more than temporary work they would get a completely
different story.

~~~
JackFr
The results also seem to defy common sense.

While it's relatively easy to believe that the income from driving for Uber
and Lyft is lower than most people imagine and it is relatively easy to
believe that a small fraction of drivers are actually losing money by driving,
it is difficult to believe that that fully 1/3 of drivers are continuing to
impoverish themselves.

I'm not saying it's not true, but without supporting details it seems
clickbaity.

~~~
notfromhere
Most people aren't math savvy and the long-term costs of riding for Uber are
more 'invisible' than the short-term cash that you'll be getting from driving.
Uber/Lyft functions by letting car owners get a quick buck in exchange for the
long-term value of the car.

People use payday loans even though they're fairly scammy and financially
irresponsible, why would Lyft/Uber be any different?

