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Uber, Lyft Drivers Earning a Median Profit of $3.37 per Hour, Study Says

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Re: Uber, Lyft Drivers Earning a Median Profit of $3.37 per Hour, Study Says

#181

Post by jogjayr »

eddieplan9 wrote: post #173

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 insuranc…

> 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,

But all of these costs go up if you drive more miles. Your vehicle depreciates more if you put more miles on it (but not if it's parked in your garage), you need more frequent oil and tire changes, and your insurance rates go up because you're more likely to make a claim the more miles you drive annually. And rideshare insurance is more expensive.

Re: Uber, Lyft Drivers Earning a Median Profit of $3.37 per Hour, Study Says

#182

Post by haldean »

rodonn wrote: post #179

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 The authors are very well respected economists from UCLA and Yale, though it sho…

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!

Re: Uber, Lyft Drivers Earning a Median Profit of $3.37 per Hour, Study Says

#183

Post by ghaff »

eddieplan9 wrote: post #173

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 insuranc…

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.

Re: Uber, Lyft Drivers Earning a Median Profit of $3.37 per Hour, Study Says

#184

Post by mhneu »

eddieplan9 wrote: post #173

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 insuranc…

Disagree. First, time value of money. The Prius costs $24k that you don't get to invest over the time you're driving. Let's call that $1-2k. Plus, most drivers will pay interest on financing the car. ($1-5k depending on credit rating). Then add: Car washing/cleaning (and/or time spent doing so). Repair (as you noted). Maintenance: oil changes, wiper replacement, tire changes. (In the opposite direction, depreciation is overestimated because you're throwing the car away after 5 years).

That gets your $15.5k down much closer to zero.

The article's bottom line is that Uber/Lyft drivers are getting paid way, way below minimum wage when all expenses are taken into account. That's left intact by the above calulcations, even if the numbers vary by 20% high or low.

Re: Uber, Lyft Drivers Earning a Median Profit of $3.37 per Hour, Study Says

#185

Post by dragonwriter »

rodonn wrote: post #179

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 The authors are very well respected economists from UCLA and Yale, though it sho…

> 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.

Fuel costs per hour could easily be a quarter or so of that, and fuel costs seem to be around 1/7 of total operating costs [0], so, yeah, $16+/hr isn't unreasonably high.

[0] https://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/files/pu...

Re: Uber, Lyft Drivers Earning a Median Profit of $3.37 per Hour, Study Says

#186

Post by nbadg »

taneq wrote: post #133
regulation_d wrote: post #111

Earlier quoted context omitted.

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…

I don't know about the U.S. but in Australia there are strict rules about 'sham contracting'. To be treated as an independent contractor you can't get more than 80% of your income from any one source. If you 'contract' to just one employer you're an employee for both tax purposes and protections.

I'm curious -- how does this work with, for example, a professional Youtuber? Are they considered Youtube employees?

Re: Uber, Lyft Drivers Earning a Median Profit of $3.37 per Hour, Study Says

#187

Post by trsse »

Someone wrote: post #153
pfortuny wrote: post #117

Earlier quoted context omitted.

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?

“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.

> 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.

Re: Uber, Lyft Drivers Earning a Median Profit of $3.37 per Hour, Study Says

#188

Post by tomjakubowski »

klenwell wrote: post #174
chrisseaton wrote: post #50

Earlier quoted context omitted.

> 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". That's not how Uber was originally promoted to drivers at all. Uber was originally promoted to high-end professional car drivers.

I'm pretty sure I heard ads from Uber or Lyft on local popular music radio stations while driving advertising $15 - $20/hr wages. Some discussion on this site: https://uberpeople.net/threads/uber-radio-commercial.27343/ Not sure if these are the same commercials I heard.

They eventually pivoted to make UberX their primary offering, but for over a year their _only_ offering, at least here in LA, was black car rides through established, professional car service drivers. I remember thinking of calling an Uber rather than hailing a cab as a luxury / splurge.

Re: Uber, Lyft Drivers Earning a Median Profit of $3.37 per Hour, Study Says

#189

Post by sokoloff »

mhneu wrote: post #184
eddieplan9 wrote: post #173

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 insuranc…

Disagree. First, time value of money. The Prius costs $24k that you don't get to invest over the time you're driving. Let's call that $1-2k. Plus, most drivers will pay interest on financing the car. ($1-5k depending on credit rating). Then add: Car washing/cleaning (and/or time spent doing so). Repair (as you noted). Maintenance: oil changes, wiper replacement, tire changes. (In the opposite direction, depreciation…

> First, time value of money. The Prius costs $24k that you don't get to invest over the time you're driving. Let's call that $1-2k. Plus, most drivers will pay interest on financing the car. ($1-5k depending on credit rating)

You can't assume that the owner has paid cash for the car (forgoing investing the $24K) AND assume they finance the $24K and ding their P&L with finance charges. (It's double counting.)

Re: Uber, Lyft Drivers Earning a Median Profit of $3.37 per Hour, Study Says

#190

Post by southphillyman »

bparsons wrote: post #121

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.

BTW Uber has a car buying program. I met a driver in Vegas who claimed to have to work long hours in order to cover the car note and have a livable wage. Felt sorry for the guy because his attitude was very optimistic when it was clear to me he was being taken advantage of.
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