Uber pay up­graded, but with qual­i­fi­ca­tions

Re­searcher says na­ture of the work might ex­plain the low fig­ure

The Mercury News Weekend - - DATA - By Levi Su­ma­gaysay lsuma­gaysay@ ba­yare­anews­group.com

A new anal­y­sis about Uber driv­ers’ wages finds that they take home about $9.21 an hour, or less than min­i­mum wage in many of the big­gest mar­kets where the ride-hail­ing ser­vice op­er­ates.

The anal­y­sis, by the pro­la­bor think tank Eco­nomic Pol­icy In­sti­tute, builds on a re­cent Mas­sachusetts In­sti­tute of Tech­nol­ogy study that at first said Uber drivers­made an av­er­age of $3.37 an hour, then re­vised that fig­ure to a me­dian $8.55 an hour. Uber’s chief econ­o­mist, Jonathan Hall, re­jected the MIT study’s find­ings in March, and re­leased the San Fran­cisco com­pany’s own per-hour fig­ure af­ter ex­penses: $13.04.

The new cal­cu­la­tions re­leased this week are de­rived from the MIT study plus newly avail­able ad­min­is­tra­tive data from Uber, ac­cord­ing to LawrenceMishel, for­mer EPI pres­i­dent and now a dis­tin­guished fel­low at the in­sti­tute.

“The low pay and small eco­nomic weight of Uber and the gig econ­omy over­all, cou­pled with the fact that Uber driv­ers and other gig work­ers are mostly work­ing on a part-time ba­sis as away to earn sup­ple­men­tary in­come, ar­gue for a change in per­spec­tive,” Mishel said in a press re­lease for his anal­y­sis on Tues­day. “There is a lot of hype aroundUber and the gig econ­omy. But in any con­fer­ence on the fu­ture of work, Uber and the gig econ­omy de­serve at most a work­shop, not a ple­nary.” Among his other find­ings: Uber driv­ers’wages break down this way:

Af­ter de­duct­ing fees and ex­penses, they­make an av­er­age of $11.77 an hour.

Af­ter de­duct­ing manda­tory So­cial Se­cu­rity and Medi­care taxes, that fig­ure goes­down to$10.87 an­hour.

Af­ter ad­di­tional de­duc­tions that are ex­plained this way — “We cal­cu­late this W-2 equiv­a­lent wage by de­duct­ing the fol­low­ing in or­der, from pas­sen­ger pay­ments: all Uber fees, such as book­ing fees and com­mis­sions; ve­hi­cle ex­penses; and the cost of a mod­est ben­e­fits pack­age, in­clud­ing manda­tory em­ployer-side pay­roll taxes.

Our es­ti­mate also takes into ac­count ex­pense and ben­e­fit in­ter­ac­tion­swith the fed­eral tax code” — Mishel ar­rives at the fi­nal fig­ure of $9.21 an hour.

About a third ofwhat pas­sen­gers pay goes to Uber for com­mis­sions and book­ing fees.

The $9.21 fig­ure put­sUber driv­ers at the bot­tom10 per­cent of wage earn­ers. Also, it “falls below the­man­dated min­i­mumwage in nine of 20 ma­jor­mar­kets, in­clud­ing the three largest (Chicago, Los Angeles and New York).”

Be­cause of Uber driv­ers’ part-time sta­tus, the 833,000 Uber driv­ers in a year is equiv­a­lent to 90,521 full­time em­ploy­ees. That “ac­counts for just 0.1 per­cent of na­tional FTE em­ploy­ment.”

Uber has said that more than half of its driv­ers in the United States drive for the ser­vice less than 10 hours a week.

“While we ap­pre­ci­ate EPI’s con­tri­bu­tion to this im­por­tant topic of re­search, the paper makes sev­eral quest ion­able claims and as­sump­tions while al­to­gether ig­nor­ing the flex­i­bil­ity driv­ers tell us they value and can­not find in tra­di­tional jobs,” an Uber spokesman said Thurs­day.

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