News & Politics

A Majority of Uber and Lyft Drivers Earn Far Less Than Minimum Wage: Report

MIT finds motorists make an average of $3.37 per hour—before taxes.

Photo Credit: Mr.Whiskey / Shutterstock

The Massachusetts Institute of Technology paints a grim portrait of life as an Uber or Lyft driver. According to a new study titled "The Economics of Ride-Hailing: Driver Revenue, Expenses, and Taxes," a motorist for the ride-sharing apps makes an average of $3.37 per hour—and that's before taxes. At least 74 percent of employees earn below minimum wage in their respective states

Researchers found that drivers for both companies have limited means to boost their wages, as workers tend to conduct their business in isolation and are less likely to compare labor conditions. Even if a driver wants to learn how much another is spending on his or her vehicle, they have no way of obtaining that information.

"Little comprehensive work has been done to establish population-level statistics on the profitability of ride-hail driving," the authors of the report write. "Ride-hailing operators know what they pay each driver but do not know whether drivers earn additional wages from a competitor nor what drivers actually spend to operate their vehicles." The researchers added, "An individual driver can precisely observe his or her own operational revenue and costs but does not know whether these are representative of other drivers or other vehicles."

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While Lyft is yet to acknowledge the study, an Uber spokesperson released a statement claiming "its methodology and findings are deeply flawed." The spokesperson added, "We’ve reached out to the paper’s authors to share our concerns and suggest ways we might work together to refine their approach."

This is not the first time Uber has come under fire. Most recently, the company announced the rollout of Uber Health, an app that allows patients and health care providers to bypass a profile requirement for secure rides to and from hospitals and medical centers. Legal experts have already sounded the alarm. The Verge reports that in 2016, the legal consulting firm Carlton Fields pointed to the possibility of data breaches and warned that ride-sharing companies like Uber "risk potential imposition of stiff penalties for data breaches, and business associate agreements should be implemented between providers and ridesharing companies."

Perhaps the company should address the findings of MIT's report before it "disrupts" the country’s transit infrastructure for health care.

 

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Mehreen Kasana is a news writer. Previously, she worked as the front-page editor for the Huffington Post. Follow her on Twitter at @mehreenkasana.