When the truth comes out, the same media outlets will likely do nothing and at most will publish a small redaction (same goes for individuals who spread this on social media). I have no expectation that the true nature of this study will be widely reported or nearly as promoted as the initial false results.
The world needs more rational skeptics. We have to hold each other accountable by ask probing questions about the nature of "facts" that are presented us. Seek truth.
I agree that the world needs rational skeptics -- and yes, perhaps more -- but looks like the peer review process is working properly here. Don't see a need to blame media bias?
assuming this is correct, the less drivers rely on driving as a primary source of income, the more incorrect the $3.37 figure would be. curious to see the updated results.
I'd previously read a paper by an economist using Uber pay data to analyze gender wage gaps. The numbers they had for both men and women were way higher than this study and it's usually best to trust administrative data over self reports.
Much more accurate would be to actually get real data from drivers, by giving them instructions to extract desired monthly data from the app itself showing income and hours online (I presume the driver-side apps include this data?).
In similar conversations you can encounter rhetoric about how we should tax people worth a million dollars. This logic doesn’t consider that a $million for a 40 year old dentist in rural Ohio is very different than for someone who just retired in New York. That’s all they have for the rest of their life.
Financial policy decions need to consider money in terms of cost of living and also age of the people. Especially in a world where pensions are barely a thing now. Going after numbers without context ends up attacking the middle class.
So for instance the $20 an hour would make more sense to Reason if it were restated as a multiple of minimum wage or the poverty line. Because if Ubuntu is concentrated in metropolitan areas that could mean most of their drivers are near the poverty line. Not as incendiary as $3.50/hr but still quite damning.
Also you can find me on Twitter where I have over 150 tweets about this from the weekend. Would love to hear your POV.
It's not even hard to find the relevant data on amortization and such: relevant government agencies will tell you what they think is reasonable. In Canada, that'll be this page. https://www.canada.ca/en/revenue-agency/services/tax/busines...
> The automobile allowance rates for 2018 are:
> 55¢ per kilometre for the first 5,000 kilometres driven
> 49¢ per kilometre driven after that
The logic goes -- you can be pretty sure to spend at least this much on your car, the taxman won't allow you to deduct more... So using these numbers, you can check the average Uber trip distance length, the time it takes you to drive it and the number of trips a month to figure out how much you are making. UberX in Toronto pays you 81 cents per km and 18 cents a minute. The Toronto minimal wage is currently 14 CAD an hour. If you do quite well and spend 30 minutes driving at a 30km/h average speed then you made 4.8 dollars on the per km part (.81-.49) x 30/2 and 5.4 dollars on the time part .18 x 30. The minimum fare won't save you because they don't deduct the 49¢ per kilometre car cost obviously.
Note https://www.mrmoneymustache.com/2017/11/22/mr-money-mustache... used the rough equivalent of 40 canadian cents/km for the same cost above we used 49c for -- it's not too outlandish, everything in the US vehicle wise is cheaper and there's some guessing involved anyways.
The 30 cents a mile in this study seems reasonable for a modest Prius or Camry assuming that driving empty to pick up passengers isn't a big portion of the total driving. It's probably close to the low-end though for acceptable vehicles.
For comparison, you can have a look at France tax deductions. They account for the type of vehicle. https://www.service-public.fr/particuliers/actualites/A12350
The absolute minimum price is 0.286 euro * km. That is if you drive more than 20 000 km a year and have the most economic car of all.
The most economic Prius from this year would fall in the rate d x 0,332.
Yes, there are high taxes on gas but it's not significant when discussing the total costs including maintenance, insurance and depreciation. Keep in mind the exchange rate as well.
In the US, you are perfectly able to deduct more if you use the actual expenses method.
"Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates."
Here's a Canadian tax advice site that suggests that actual expenses are permitted in Canada as well: https://www.thebalance.com/vehicle-expenses-you-can-claim-on...
Edit: Direct CRA citation that actual expenses are allowed: https://www.canada.ca/content/dam/cra-arc/formspubs/pbg/t777...
> We can use tax allowances instead of actual car expenses because you can be sure the taxman won't allow you to deduct more than what you are spending so the earnings we calculate here will not be more than the actual.
As a formula:
#1: (actual car expenses) <= (tax allowances)
Adding (total uber fees)
#2: (total uber fees) - (actual expenses) <= (total uber fees) - (tax allowances)
and then we go on to prove
#3: (total uber fees) - (tax allowances) < minimal wage
#4: (total uber fees) - (actual expenses) < minimal wage
Changing <= to = (as you suggest) in #1 and #3 doesn't change the logic of our proof.
Maybe if I was driving a lifted F-350 through hilly terrain I'd start to be at the break even point, but using that number as an actual cost is waaay overestimating the actual cost, especially since Uber and Lyft require relatively new (read: efficient) vehicles.
(Obviously Hertz can buy and maintain cars for less than an individual. On the other hand, they need to make a profit on the rental.)
If that's real cost, it means that all Moscow drivers are engaged in money losing operation, and it's obviously not the case
These are amazing, I love them. My SO and I don't own a car, we rent one when we need. Once she had a working trip to Quebec for a convention, I came with her and we rented a car. We made 40$ of profit from renting that car because of that 50 cents per KM that were refunded (in case it's not clear, it does include the gas price).
I have no idea if the renter we use (Communauto) loses money, I seriously doubt it because they keep adding more and more car into their network.
It does not seem like such a bad idea for society to have some entrepreneurial like jobs that are easy to get but don't pay very well until one becomes good at it.
While a driver can potentially increase the hourly rate at which they work, they can do so only by choosing not to work at certain times. Unlike an entrepreneur, an Uber driver cannot increase their compensation rate by working to develop customers; expand business lines, and importantly by hiring staff. To put it another way, an entrepreneur would have the potential of increasing their profits with the availability of self-driving cars while self driving cars are potential competition for Uber drivers and likely to produce wage suppression.
Not to put too fine a point on it, but the large number of people described as depressing wages in the first sentence of your comment is the large number of people driving for Uber.
> One common feature of entrepreneurship is making money while sleeping.
Do you not consider mom and pop shops entrepreneurs? Local business that close at 5pm-6pm. I'm also not sure small business would usually qualify for this:
> entrepreneurship requires a freedom to develop the business and take economic advantage of extraordinary market opportunities should they arise
Don't get me wrong, every mom and pop shop isn't run by successful entrepreneurs. But when the local team is doing well, they have the freedom to dedicate shelf space to big foam fingers in the appropriate color and up the price to whatever the traffic will bear. An Uber driver can't set prices when the Super Bowl comes to town.
Until it gets abused by employers as a cheap source of labor and then sold to the public as "adding jobs". Those entrepreneurial jobs exist already as door to door salesmen and MLM people.
If you can be this smart about Uber driving, you can be this smart about getting a decent salary job, so this doesn't make sense rationally because Uber ultimately has a low earnings ceiling for drivers.
Because no one ever needs to eat or pay the rent while they are learning their new job?
Sure, pay folks less while learning. That's fine. At least minimum wage, though - that's what minimum wage is there for. Then give them a raise. If employees have to "game the system" to earn minimum wage, what's the point? Besides, such companies do need folks during off hours, just like restaurants need wait staff during non-peak dining hours. Might as well act like it.
Take your advice to the end: nodody should drive unless there’s a surplus of fares. That would cause much of the day to qualify as surge. The premium Uber pays for surge would drop substantially in order to protect their margins. Which means your earning potential would decrease. Now the first quartile of employees are barely making more than the third quartile. That sucks for everybody.
That's more than you can say for A LOT of analyses that are published.
This is exactly how public discourse should work, so good job to everybody (so far).
1. It is employment, not a contract. They punish you if you don't do X hours a week.
2. They don't pay minimum wage, or other employment things like workers comp, unemployment tax, or others.
3. They actively seek to undermine all laws that protect the taxis and the citizens who ride.
4. They actively encourage lack of awareness with regarding commercial driving and the law. If one does not have commercial insurance, you are driving uninsured. If in a traffic incident, your license will be suspended.
It's just another company trying to socialize the risk and privatize the profit. And they're socializing the risk on the poor and needy by giving them hope and screwing them in ways they don't understand.
At best, a company like Uber could provide a logistics service to taxi drivers and transport companies.
Ride-sharing, optimized route planning, easy dispatching etc are all nice features and make the service cheaper by reducing overhead costs.
However this is not what made Uber such a success. It was the unreasonably low prices it offered. How did it manage to do so? By externalizing a number of costs onto workers and society.
And by the way, the article has a very deceptive title. Just because the author agreed to re-run the numbers with Ubers "hopeful" and "optimistic" assumtions doesn't mean the initial numbers where wrong or that the new numbers will be substantially better. They're still employing people for less than minimum wage.
> However this is not what made Uber such a success. It was the unreasonably low prices it offered.
Isn't it? I don't use Uber because it's cheaper I use it because I can have them come straight to my front door hailed from an app leveraging gps with continuous updates to their progress then have my destination programed into the driver's gps ultimately paying automatically with no hassle of cash or fighting over credit cards.
The Uber experience was many light years beyond the existing taxi options (even in cities with good taxi system -- which is not many). That is why they are popular, not because they are cheap.
I also think there's something extremely novel about letting users participate in the system as drivers. There was nothing like that before either.
This is why I use uber the twice a month I need to get home from a bar or am otherwise unable to drive. And yeah, for twice-a-month rides, I'd be happy to pay full taxi rates; more, really.
The thing is, because uber is so cheap, I've gotten rid of my car and I just use uber all the time. If uber raised their prices, I'd buy a car. Sure, I'd still use them twice a month, sure, but I use them twice a day right now.
The upshot here is that about 1/30th of my uber rides are because the uber system provides a better experience than existing taxis in my area. 29/30ths of my uber rides are because they are so cheap and convenient that I pay only a small premium over owning a car to have someone else drive me all the time.
If uber raises their prices? I'll just go buy myself a Honda. Uber will keep 1/30th or so of my existing business; 29/30ths of the business they get from me will evaporate after they cross that line where I go buy that Honda.
The response from the lead author was pretty reasonable and I will camp on his response. I was expecting something defensive rather than “yeah, maybe, let me double check my work.”
If you read the back-cover of any of these CEEPR working papers, it includes a disclaimer stating that they have not passed any peer review:
CEEPR releases Working Papers written by researchers from MIT and other academic institutions in order to enable timely consideration and reaction to energy and environmental policy research, but does not conduct a selection process or peer review prior to posting
My suspicion with some back of the envelope calculations is that it probably ends up somewhere in the minimum wage range most of the time. Especially at the higher end of that range, it sort of makes sense. Assuming at least a reasonable percentage of drivers have some rational handle on what they make and their real costs, that's about where you'd logically expect pay to need to end up.
To be clear, I'm sure some drivers don't really understand their costs or know that they're effectively borrowing from their future self who will have to pay maintenance bills--and feel they don't have an option. But it's a bit hard believing it's near universal behavior.
Your assumptions are incorrect. The world is filled with people who can't estimate costs, it's actually pretty difficult.
I've worked in online gambling before. I think it has a lot of similarities with Uber. It's entirely possible to have the vast majority of your customers lose money.
For budgeting, I’ve tried to just arrive at a cost per month of ownership for a car with expected depreciation (not cost to purchase), ins., gas, and expected maintenance.
> As a benefit to our Associates, the latest Working Papers are embargoed for a period of up to six months before becoming accessible to the public.
The list of associates can be found here: http://ceepr.mit.edu/support/associates
I don't know this to be true without seeing a citation. In Seattle and Maui (two places I've used a car service recently), it has seemed to me at least the Lyft drivers I've encountered were all full-time drivers.
(Numbers for illustration only; they aren’t likely to reflect Uber’s population of drivers)
Also, I'm astounded at least two people bothered to downvote my factual reporting.
Is that the level of communication that we expect from our leaders now? I've always held an image of the character that CEOs of large corporations strive towards as reasoned, rational and "stately", at least in their public role. This sounds like the outburst of a petulant adolescent, and is disturbingly reminiscent of a certain presidential figure.
Is this a consequence of some societal shift towards communicating at the lowest possible denominator, or do I just have an overly conservative view of what is expected from people in those positions?
Stately speaking has hit a new low. It's no surprise that CEOs and politicians alike are picking up on what I call Idiocracy-speech.
There was a video a few years ago published on youtube by CCP Grey called "This video will make you angry". It explains how angry memes spread faster, and are more durable than other types. I'd surmise that this is true.
MIT = Mathematically Incompetent Theories (at least as it pertains to ride-sharing). @techreview report differs markedly from other academic studies and @TheRideshareGuy recent survey. Our analysis: [https://t.co/S2aAqCuDR0]
Take certain men coming out in women's defense but then being lambasted as hypocritical because he himself had some less serious offenses. This attitude alienates men and causes a defensive reaction. Instead of attacking the real problem which is a culture problem that affects men and women the individual human is attacked. This is no way for change. It marginalizes opinions that fester until they become worse.
Do we dehumanize those who would dehumanize others? No. Because acceptance of the humanity of others and ourselves is the only way to break cycles of hate.
Re-running analysis with more optimistic assumptions is not how science works.
This study has a huge human component since no single party has all the data needed to calculate the answer.
Uber has a lot of data, but even they don't know total hours spent before or after shifts in prep for work nor expenses with regard to vehicle maintenance.
I would think Uber has exactly the data they would need to calculate this meaningfully, or at least the points you list aren't the decisive shortcomings. Most jobs require that you get yourself to work and prepared (to some degree, at least, but one that seems to apply fine to Uber drivers) on your own time. Also, in the blog post they state that they agree with the methodology around calculating cost of vehicle use, which regardless is not an area of great contention. There are stable and largely uncontroversial numbers published by tax authorities, and there are rental agencies that provide vehicles at fixed rates.
And with another set of assumptions result was that they are serverly underpaid.
So, exactly what we have learned here, other then different assumptions yield different results?
Perhaps you have come across interval arithmetic:
The key aspect here is the study’s author is willing to change his study based on criticism, to try and determine whether it still produces the same conclusions. That is precisely what science is about!
String theory is nothing more than an assumption.
It was median, not average, as well, which makes sense as potentially being lower than an average wage.