Uber and Lyft drivers are earning a median profit of $3.37 per hour, a new study says.
Researchers at MIT analyzed Uber and Lyft by comparing a survey of more than 1,100 drivers with vehicle cost information.
The results showed that, per hour worked:
--Median profit from driving is $3.37 per hour before taxes.
-- 74% of drivers earn less than the minimum wage in their state.
--30% of drivers “are actually losing money once vehicle expenses are included.”
That third point underscores the fact that ride-share drivers supply their own vehicles.
“On a per-mile basis, median gross driver revenue is $0.59/mile, but vehicle operating expenses reduce real driver profit to a median of $0.29/mile,” the report states. “For tax purposes, the $0.54/mile standard mileage deduction in 2016 means that nearly half of drivers can declare a loss on their taxes.”
The study adds that “if drivers are fully able to capitalize on these losses for tax purposes, 73.5% of an estimated U.S. market $4.8 billion in annual ride-hailing driver profit is untaxed.”
In short, the MIT Study suggests that most Uber and Lyft drivers are earning less than minimum wage for their work – and nearly one-third off drivers are actually losing money by choosing – to borrow Uber’s recruiting catchphrase – to “be your own boss.”
News reporting about the MIT study by National Public Radio, The Guardian and other media outlets has prompted Uber to state publicly: "While the paper is certainly attention grabbing, its methodology and findings are deeply flawed. We've reached out to the paper's authors to share our concerns and suggest ways we might work together to refine their approach."
The impact of the study could have national implications – and here in Texas.
Houston City Council at-large member Michael Kubosh says he’s not surprised by the study, telling Newsradio 740 KTRH that he’s heard complaints firsthand about rideshare-service business practices.
Kubosh and other local officials, however, have little they can do about the matter. That’s because the Texas Legislature change the law so that the state itself -- and not municipalities – now controls rideshare regulations.
Both Uber and Lyft drivers are independent contractors, not employees of the companies – meaning the drivers are not eligible for health insurance or sick time.