People who drive for ride-sharing companies like Uber and Lyft are earning less than minimum wage, and nearly one-third of them are losing money, researchers at the Massachusetts Institute of Technology said.
According to a paper written by Stephen M. Zoepf, Stella Chen, Paa Adu and Gonzalo Pozo at MIT's Center for Energy and Environmental Policy Research, the median pretax profit earned from driving is $3.37 per hour after taking expenses into account. Seventy-four percent of drivers earn less than their state's minimum wage, the researchers told National Public Radio.
Thirty percent of drivers "are actually losing money once vehicle expenses are included," according to the authors’ research.
Researchers interviewed more than 1,100 drivers, who revealed their revenue, the number of miles they drove and the type of car they used, NPR reported.
The authors then factored in costs of car insurance, gasoline and maintenance to arrive at their figure.
Drivers earning the median amount of revenue are getting 59 cents per mile driven, researchers said, but expenses take out 30 cents, meaning drivers turn a profit of 29 cents per mile, NPR reported.
In a statement to The Guardian, an Uber spokesman called the methodology and results "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 spokesman wrote.
According to MIT researchers, 80 percent of drivers polled said they work less than 40 hours per week.
Uber and Lyft have "notoriously high" turnover rates among drivers, NPR reported, with only 4 percent of the drivers staying with Uber for at least a year.
About the Author
