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Riding Low? New Study Finds Drivers At Uber, Lyft Make Less Than Half Of What They Did 4 Years Ago–$9.21 An Hour At Uber

Riding Low? New Study Finds Drivers At Uber, Lyft Make Less Than Half Of What They Did 4 Years Ago–$9.21 An Hour At Uber

Written by Ann Brown

Sep 30, 2018

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It’s rare for your earnings to go backward. But That is what has happened to many Uber and Lyft drivers.

According to a new report, drivers for “online platforms including Uber and Lyft are making less than half of what they did four years ago, even as more and more people are drawn into working for them,” Market Watch reported.

Average monthly platform earnings for drivers dropped a whopping 53% between 2013 and 2017, found a report from the JPMorgan Chase Institute, which was based on payments directed to 2.3 million families. Drivers made $783 monthly in 2017 versus $1,469 in 2013.

“In the first quarter of 2014, nearly half of drivers who work for on demand platform such as Uber and Lyft, earned $900 a month or more. However during the first quarter of 2018, less than 25% of drivers were able to earn more than $900, the report found,” Market Watch reported.

“These declines in monthly earnings among drivers may reflect the fact that the growth in the number of drivers could have put downward pressure on hourly wages; they may also reflect a potential decline in the number of hours drivers are driving,” the report stated.

“Regardless of whether the drop in earnings was caused by a fall in wages or hours or both, it indicates that driving has become less and less likely to replace a full-time job over the past five years, as more drivers have joined the market.”

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(Photo: Flickr)

But some say this new study isn’t a complete look at the industry. “There are many possible explanations for the drop in drivers’ wages, which occurred as the number of drivers rose. It could reflect that more drivers are choosing to work part-time, or that an increase in drivers is pushing down hourly wages overall. The study was based on deposits to bank accounts, which meant researchers couldn’t extract hourly data,” Smart Cities Dive reported.

Uber and Lyft both dispute the study’s findings. “The fact that this study did not examine hourly earnings, the metric that drivers care most about, has resulted in misleading headlines,” said Adrian Durbin, senior director of communications at Lyft. “Had it done so, the results would have shown stable driver earnings in recent years.”

According to Uber: “The study’s findings reinforce what we and many others have said for some time: that the growth in on-demand work is driven, in large part, by people who use platforms like Uber on the side. Given the growing share of people who use platforms like Uber only occasionally, a more appropriate metric to focus on would be hourly average earnings, which have remained steady over time.”

A different study published by Lawrence Mishel, a distinguished fellow at the Economic Policy Institute, did look at the hourly earnings, and it found that when taking into account “fees as well as other expenses incurred, Uber drivers typically end up earning just $9.21 an hour,” Market Watch reported.

According to Mishel, there has been an increase in the amount of Uber drivers over the course of four years who are driving fewer hours weekly.

Still, the reports come during a time were many are re-examining the gig economy and treatment of freelance workers. “New York City last month became the first city to cap ride-hailing and is requiring that companies provide drivers a minimum wage of $17.22 an hour, to combat poverty among drivers (Lyft and Uber have argued they already pay a living wage). Chicago is discussing its own ride-hailing regulations, and aldermen there are pitching higher pay mandates, while Seattle is also discussing a rate hike to send more money back to drivers,” Smart Cities DIve reported.

 

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