Ride-hailing drivers earn more than study originally stated
A hotly contested study claiming that Uber and Lyft drivers make less than $4 per hour after expenses was significantly revised Monday, now saying drivers earn a median $8.55 or $10 per hour.
“The profit from driving is higher than we initially reported,” wrote the study’s lead author, Stephen Zoepf, executive director of the Center for Automotive Research at Stanford, in a statement on Twitter. Critiques of his original methodology were valid, he said. The revision offers two numbers based on two different methodologies, but both show earnings much higher than the median $3.37 per hour his research initially reported.
Zoepf called on Uber to participate in an “open, honest and public assessment” of drivers’ actual earnings. The latest numbers are an initial assessment, according to Zoepf, who plans to thoroughly revise his analysis over the next few weeks.
Both San Francisco ridehailing companies swung into full-out damage control mode when the study that Zoepf led for the MIT Center for Energy and Environmental Policy Research was released on Friday. Uber CEO Dara Khosrowshahi tweeted a critique calling it “Mathematically
Incompetent Theories,” Uber chief economist Jonathan Hall wrote a detailed rebuttal, and both companies mounted a PR offensive.
Uber took a conciliatory tone toward the revised study on Tuesday, while Lyft was more hard-hitting.
“When an academic study changes so dramatically in just a matter of days, that’s a real flag,” said Lyft spokesman Adrian Durbin in an email. “While the revised results are not as inaccurate as the original findings, driver earnings are still understated. MIT’s study has fundamental methodology problems.”
Uber’s statement read: “We thank Professor Zoepf for acknowledging a major flaw in his methodology and support his decision to conduct a thorough revision of the paper over the coming weeks.”
The brouhaha underscores how vital drivers are to both services. Driver turnover is high — the study said it ranged from 50 to 90 percent, a statement that neither company disputed — so Uber and Lyft must constantly attract new streams of recruits to keep cars in service.
Driver earnings have long been difficult to calculate because of the piecemeal nature of working for the services. A few years ago, Uber advertised that drivers could make $90,000 a year in New York and $74,000 in San Francisco, a claim that was swiftly refuted. Uber paid $20 million to settle a Federal Trade Commission lawsuit that claimed its statements about earnings and a vehicle financing program were false and misleading.
Harry Campbell, a Los Angeles driver, runs the RideShare Guy blog, which surveyed more than 1,100 drivers last week about a range of issues, including earnings. Although the MIT report used his data, Campbell said drivers responding to the survey make much more before expenses than the revised MIT study assumed. (The study used a different method to deduce hourly earnings before expenses.)
Still, the revised numbers “sound more realistic and in line with my experience,” Campbell said in an email. “Ultimately though, you have a ton of variability on both the income side and the expenses side of rideshare driving, so it wouldn't surprise me if some drivers still felt that true earnings were lower. Drivers in the Bay Area for example earn $5-10 more per hour than drivers in smaller cities. So if you’re driving in a small city during sub-optimal times with a gas-guzzling SUV, you could easily be making just $3-4 per hour profit.”
One aspect of the report is not in contention. It said that expenses for fuel, maintenance, insurance, repairs and depreciation average a bit more than $3 per hour. The companies and Campbell all said that seemed accurate.