I probably should have written about this sooner, but I’ve been busy driving for Uber and making much more than $3.37/hr in the process. I finally have a few moments so I wanted to address the paper written by?Stephen M. Zoepf, Stella Chen, Paa Adu and Gonzalo Pozo at MIT University.
I’m not really sure where to begin as the paper itself doesn’t have a ton of information on it other than they surveyed 1,100 drivers with “detailed vehicle cost information”. The costs are not broken down, but I assume they’re referring to things like gas, new tires, repairs, and any other cost related to driving. They claim the average wear and tear on the car is around $0.30/mile which is fair considering that is actually less than the per-mile write off allowance that taxes provide.
Another claim is that median revenue is $0.59/mile (or $0.29/mile after wear and tear) which may be on the low side depending on the market, but still somewhat fair if you factor in everything drivers don’t. Many per-mile figures only factor in the mileage when the app is in drive mode, or picking up/dropping off a passenger which is obviously flawed. They want to make it sound like you’re getting the full $1/mile (give or take depending on market) that Uber is paying you, but they’re only paying you that amount when the passenger is in the car.
With that, I will concede the media gross revenue could be around $0.59/mile based on the people they polled. When I first started driving, my per mile rate was around $0.50/mile, so that is a realistic number.
What I still don’t understand is how they got the $3.37/hr figure because that would mean even based on their very low 0.29/mile figure, the average driver polled is driving 11.62 miles per hour (or less). That is the figure I find absolutely hard to believe based on my own experiences. I drive in Boston and tend to get a lot of short trips of 1-2 miles, but by the end of the night, I am still up over 200 miles for every 8 hours I do which figures out to be 25 miles per hour in a congested city? (my median per mile average is also roughly $0.90+ .. or $0.60 after their wear and tear expenses).
So, on the worst case here using only 200 miles for an 8 hour shift at $0.60/mile, that is $120 for the day or $15/hr. I understand the Boston market is higher than many other markets, but $15/hr is a far cry from $3.37/hr which tells me that the writers of this paper really needed to poll more than 1,100 people in all different markets.
My conclusion: The paper is bull. Yes, it is entirely possible that drivers who don’t know what they’re doing in super small markets are indeed making below minimum wage, but to say the average driver is making under $4/hr is completely absurd.